|
At many independent schools, the business office’s methodology for tracking contributions differs from the advancement office’s methodology for tracking and reporting its goals. For example, an advancement officer may hear a piece of good news from a donor: “I will donate $500 for a table at the upcoming dinner gala.” The business officer will want to understand the intention behind that gift, whether it’s a reciprocal or nonreciprocal transaction. This means they’ll want to know if the donor expects to receive a benefit from the donation, such as sponsorship logos or their name in the program. The answer may change how the full amount is recorded as a contribution to the school.
As schools begin to see much more significant and complex gifts from donors — from cryptocurrency to planned giving — it is essential that business officers bridge the gap between departments to make sure that this information is clear on both fronts, both to internal teams and in terms of any external reporting. “Regular communication can help the advancement office understand potential accounting treatments, and it helps accounting to understand the goals of a campaign and/or budget,” explained Jennifer Tingley, CPA, of CliftonLarsonAllen.
In a digital session for the 2022 NBOA Annual Meeting, Tingley and Sarah Reichling, CPA, broke down key questions business officers should ask when partnering with advancement professionals at their schools.
Checks and Balances
The business office should strive to segregate accounting duties to create “checks and balances” among staff, reduce errors and limit risk. To determine if your internal controls are effective, business officers should ask the following questions:
- How are we getting contributions through the door? Are they going directly to the development office, or are they going to the accounting office as well?
- Do we have the right controls in place to ensure that the contributions can’t go missing (i.e., two people opening the mail)?
- Are staff members logging those contributions? And do those contributions align with what is recorded in the donor database?
Contribution Policies
Contributions are becoming much more complex, from cryptocurrency to land or real estate, said Tingley. To meet an evolving philanthropy landscape, ask the following questions:
- What is in your gift acceptance policy?
- Is the contribution in line with your school’s mission and values?
- Are you being transparent to your school and to the donor?
- What is the reputational risk? For example, are you an organization that would take stock that’s heavily invested in oil, or is that outside your values as a school?
- What are the legal requirements? For example, if you receive land through a donation, is there any sort of environmental remediation that needs to occur before accepting that gift?
- What are the tax implications?
2022 NBOA Annual Meeting attendees can view the full presentation and slides, along with those of 30 other 30-minute digital-first sessions, at nboaannualmeeting.org starting February 14. Registration for the Digital Pass will be open through February 20.
