# Set up tracking for restricted gifts and grants

A system to record donor restrictions, track spending against them, and release net assets correctly at month end.

- Topic: Finance & Accounting
- Framework: Few-Shot
- Level: Standard
- Tags: Finance, Analyze, Code, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/set-up-tracking-for-restricted-gifts-and-grants

## Prompt

```text
Help me set up tracking for donor-restricted funds at my nonprofit.

**Accounting system:** [e.g. QuickBooks, Sage Intacct, spreadsheet]
**Current restricted gifts and grants:** [PASTE: donor, amount, date, restriction wording from the gift letter or award, time period, conditions]
**How we track them now:** [classes, funds, a spreadsheet, nothing]
**Problems we have had:** [e.g. spent on the wrong program, auditor adjustments, unclear donor intent]

Give me:
1. A classification for each gift: without donor restrictions, with donor restrictions (purpose, time, or perpetual), and whether it is conditional (a barrier plus a right of return) and so not yet recognized as revenue.
2. A coding structure (funds, classes, or tags) that lets us report spending by restriction without overbuilding.
3. A restricted funds register: columns for donor, restriction, amount received, amount released, balance, expiry date, reporting due date, and source document.
4. A monthly release process: how to identify qualifying expenses, the entry to release net assets from restriction, and who reviews it.
5. Red flags: ambiguous restriction wording to clarify with the donor, restrictions about to expire, and balances spent in excess of available funds.
6. Language for gift agreements and appeals that reduces ambiguity (e.g. "or where most needed" clauses).

Follow US GAAP for nonprofits (ASC 958) unless I say otherwise. This is general information; confirm treatment with our auditor or CPA, and never reclassify a gift without documentation of donor intent.
```

## What to fill in

- e.g. QuickBooks, Sage Intacct, spreadsheet
- classes, funds, a spreadsheet, nothing

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