It’s a normal routine for the church to accept contributions because it is their way to pay all of their expenses. Of course, managing contribution is not always as easy as it looks. It is the church personnel’s responsibility to decipher the different types of contributions that they have been receiving and how to account for them. There are four types of church contributions in which the church financial manager should be aware of.
First in line are cash donations. Cash donations are a church accountant’s best friend. The value of the donation is never in question. This makes it easier for the church staff to record and organize the contribution.
Next in line are non-cash donations; these donations includes cars, boats, airplanes, or other valuable assets for which there are no fixed or definite prices. The first time a church receives this type of donation they are usually shocked. These donations leave church accountant’s trying to find out the value of the asset donated. It can be difficult to record a contribution if you don’t know how much it is worth.
A third type of contribution is an anonymous small gift. These gifts are difficult to record because often times they are given to church leaders without ever telling the church accountant. Most accountants find it very difficult to record a contribution that they don’t know about.
The last type of donation that we’ll discuss today is labor donations. There may be situations in which a labor donation does not require recording. It can be extremely difficult to gauge the value of an act of labor. However, if the donated labor is accompanied with tools or other assets that were specifically bought in order to help the church, then these contributions can be recorded.
If managing the different types of contributions was not enough, there are also rules stipulating what needs to be recorded depending on the amount donated. Some smaller-valued donations may not need to be recorded depending on what type of contribution they are. At the end of the day, if you have any questions about what should or shouldn’t be recorded, you’ll want to talk with a professional accountant or lawyer.
Now that you have the basic idea of some of the different types of church contributions that you’ll be seeing as a church accountant, hopefully you will be better prepared to handle them. If nothing else, at least now you’ll know which questions to ask.
Photo by sportimage **Courtesy of sxc.hu
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