Jitasa Nonprofit Blog

Support Center Question of the Week: Recording Grant Monies

The Situation

Question of the weekIn the last few months our Nonprofit has received multiple grants. We are a little confused on how to enter those correctly in regards to an invoice date. Do we record the date we received the award letter or the date we received the actual money?

The Question

What is the correct way to record grant money?

The Answer

Congratulations on receiving multiple grants! The type of grant you receive will determine how to record the data.

If the grant is an unconditional gift (one where they are giving you the money up front and there are no restrictions) you record it at the time you receive notification of the promise (usually an award letter). In this case, you would use the award letter date. If there is no award letter then you would record it when you receive the contribution. For example you receive an award letter on 5/20/2014 for a grant of $10,000 to use toward ABC program and then payment comes on 6/15/2014 you would record it at the award letter date of 5/20/2014.

If the grant has contingencies to qualify for additional funds 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. Say for example they award you $30,000 on 5/20/2014. You initially get $10,000 which you would record on the award date of 5/20/2014 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.

Reimbursable grants are grants 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.

Marci Cozby, Support Center Associate for Jitasa

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