Your organization has made the decision to raise money with a capital campaign. The feasibility study has been completed, a committee has been formed, and the planning phase has begun. Have you considered including a member of the accounting department as part of your campaign team? Often times, the accounting department is not consulted until after the campaign is rolled out. However, this department should be included from the beginning to ensure campaign success and avoid any conflicts and misunderstandings in the future with employees, the board, and donors.

The following are some suggestions to consider when planning and beginning your next capital campaign.

Create Campaign Ground Rules for All to Follow
Understand and embrace that the accounting, campaign committee and development departments see things very differently. For example, the development department is focused on achieving a goal and wishes to include all types of gifts in campaign totals while the accounting department is focused on cash to cover expenses and accurate reporting of financial information. Some gifts may not be able to be recorded in accordance with GAAP (generally accepted accounting principles) until certain criteria are met and, therefore, may not be able to be counted in total campaign dollars during the year. Both parties have a critical role to play, and it is vital to understand each other’s perspective before the campaign begins. Consider creating a gift acceptance policy, if the organization does not currently have one. Setting ground rules, such as defining what types of gifts will count toward the campaign, will prevent miscommunications and incongruities between campaign progress reports and financial information which can lead to mistrust and negative publicity for the campaign and the organization.

Campaign Mechanics and Training
Review campaign materials before they are distributed to make sure they are clear and concise. All team members should understand the materials and how pledges will be tracked. Before the campaign begins, brainstorming potential scenarios and tackling mechanical problems will reduce the number of potential issues and will make sure that resources are used efficiently. Do the pledge cards include all the necessary information that will be required to process the pledge and send reminders? What different types of payment methods will be allowed? Does the organization have the ability to accept and process the pledge payments, or will it be necessary to outsource collections? How will the money get to the bank? How will pledge information be protected?

Database Management and Reconciliations
Create guidelines for entering pledges. Prohibit the use of nicknames, such as Sue rather than Susan, to avoid entering duplicate pledges. Discuss and decide ahead of time what types of reports are necessary and when these reports should be run to timely track and record campaign information. Test that the information in the reports is accurate. Create several different types of test donors to see if the information flows properly to the reports before the campaign begins. Create and document the procedure that will be followed when a pledge is discontinued or how a current pledge can be increased or decreased as donors’ situations often change during a campaign. Segregation of duties in entering and changing pledges should also be considered. Make sure there is a process requiring documentation and approval for all pledge changes. Test the write-off procedure and its effect on the reporting to make sure it is also accurate. The donor database will serve as the subsidiary ledger for the information recorded in the general ledger. Reconciliations between the subsidiary ledger and the general ledger should occur monthly so that errors are caught early. It is important that both the accounting and fundraising departments understand how the database works and what reports each department needs.

Although this article focused on the importance of communication between the accounting and fundraising departments before and during a capital campaign, it is important that all staff, board members and volunteers involved in the campaign are educated and informed about the campaign. They should understand the purpose, goals and rules of the campaign so that they are equipped to share that information with donors.

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Sandy Jensen
I joined Hawkins Ash CPAs in 2001 and am a partner in the firm's La Crosse office. I provide audit services to nonprofit and educational agency audits. I also have extensive experience providing audit services to credit unions. I am chair of the firm’s nonprofit service group and a member of the firm’s Audit and Accounting Committee.

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