Recording Nonprofit Grant Monies Correctly
Recording grant money can be confusing, below are some recording guidelines to follow based on which grant your organization has received. Because recording these monies is largely determined by the type of grant you’ve received, we’ve broken recording down by grant type.
Recording an unconditional gift
- An unconditional gift is one where the money is provided up front and has no restrictions.
- In this case, you would record the grant at the time you receive notification of the promise (usually an award letter).
- If there is no award letter then you would record it when you receive the contribution.
- For example you receive an award letter on 5/20/2015 for a grant of $10,000 to use toward ABC program and then payment comes on 6/15/2015 you would record it at the award letter date of 5/20/2015.
Recording a grant with contingencies
- Contingencies mean that to qualify for additional funds you have to meet certain requirements, as designated by the grantor.
- In this case, you would record only the first installment at the award date and then when the contingencies are met and you receive additional funds you would record them at that point.
- For example they award you $30,000 on 5/20/2015. You initially get $10,000 which you would record on the award date of 5/20/2015 but to receive the next $10,000 you have to show that xxx program had 30 or more students for 3 months. After the 3 months if your program requirements were fulfilled then you would receive the next disbursement and would record that when received.
Recording Reimbursable Grants
- A Reimbursable grants is a grant where you receive money after you have incurred costs for a program.
- You would record those grants after you have incurred expenses and receive the funds.
- For example you receive a $5000 grant for expenses associated with C program, when you have incurred the $5000 in expenses you will let the grantor know and they will send funds (usually they have a form or report requirements for you to submit). You record the funds at the time you receive the check.
Renata Massie, Content Creator for Jitasa