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Level 1

What is the definition of restricted donations (permanent and temporary)?

 
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Best answer October 15, 2018

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QuickBooks Team

What is the definition of restricted donations (permanent and temporary)?

Hello candace!

Let me share this information with you.

Restricted contributions are donations received by an organization in which the donor restricts the use to a particular purpose.  The two types were Temporary and Permanent.

For Temporary Restrictions, these were funds donated to a nonprofit that may be temporarily restricted. Temporarily restricted funds may be either time restricted or purpose restricted. If the donation is time restricted, the funds must be used in a specified manner for a period of time. While for Permanent Restrictions, a donor may place a permanent restriction on funds donated to the nonprofit. In contrast to temporary restrictions, permanently restricted donations use the interest accumulated on donated funds as financial support for an indefinite period. Provided the nonprofit uses the funds in a manner specified in the gift instrument, the funding is theoretically forever.

I highly suggest you seek your accountant’s advice on setting this up in QuickBooks.

Please stay in touch with us if you need any help.

 

View solution in original post

1 Comment
QuickBooks Team

What is the definition of restricted donations (permanent and temporary)?

Hello candace!

Let me share this information with you.

Restricted contributions are donations received by an organization in which the donor restricts the use to a particular purpose.  The two types were Temporary and Permanent.

For Temporary Restrictions, these were funds donated to a nonprofit that may be temporarily restricted. Temporarily restricted funds may be either time restricted or purpose restricted. If the donation is time restricted, the funds must be used in a specified manner for a period of time. While for Permanent Restrictions, a donor may place a permanent restriction on funds donated to the nonprofit. In contrast to temporary restrictions, permanently restricted donations use the interest accumulated on donated funds as financial support for an indefinite period. Provided the nonprofit uses the funds in a manner specified in the gift instrument, the funding is theoretically forever.

I highly suggest you seek your accountant’s advice on setting this up in QuickBooks.

Please stay in touch with us if you need any help.

 

View solution in original post

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