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FUNDS
Version 2024.02
Funds allow you to track the cash balances of funds set aside for specific purposes, increasing or decreasing the fund's cash balance with each transaction in your Journal.
The simplest non-profits may have just one fund, often called a "General Fund", but non-profits commonly have a handful of different funds for various purposes. Even if you have just one fund, you'll still need to add it to the Funds sheet.
Enter all of your funds in the Funds worksheet, bringing forward your ending balances from the prior year as your beginning balances to start the next.
Note that the names of funds used to track donations will be shown on donor statements, so choose names for your funds that you would want your donors to see, and will make sense to them.
Don't confuse funds with accounts or budgets. You'll setup your chart of accounts and their annual budgets in the Accounts/Budget sheet.
Furthermore, while the total balance of your funds should match the total balance of your bank accounts, don't confuse funds with bank accounts.
The key to understanding funds: funds allow you to track the cash balance of various funds designated for specific purposes, regardless of how those dollars are allocated across bank accounts (or, lumped into a single bank account).
The highlighted Total Beginning Balance will automatically add all your beginning fund balances entered in this sheet, and this total will be used as the starting balance for your Journal for the year. Do not manually edit this cell (or any other light yellow cells) since it is calculated via a formula.
Each fund must be designated as "Unrestricted" or "Restricted" in the Type column. A general fund is typically unrestricted (can be used to meet any purpose within your organization). Restricted funds are typically restricted to a specific purpose by the donors and/or organizational leadership.
When you receive donations or grants that stipulate that the funds must be used for a specific purpose, a restricted fund should be setup to help you track (and demonstrate) that the funds were used for their designated purpose.
Non-profits can reject restricted funds at their discretion.
If the specific purpose of a restricted fund has concluded and a balance remains, non-profits must refund the remaining balance to the donors, or ask the donors for permission to use the excess funds for some other purpose (including moving restricted funds to an unrestricted general fund). You may need to create a special "Fund Transfer" contact in your Contacts sheet to transfer funds from one fund to another in your Journal.
You can easily add new funds throughout the year, but new funds should have an opening balance of $0 on your Funds sheet. Then you will increase/decrease the balance of the new fund using transactions in your Journal.
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