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9 Responses to Ask a Question

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  5. Stephanie De La Rosa

    We receive donations that are earmarked for our winter camp programs to be applied to camp attendees (we call them sponsorships). They are received in advance and put into a deferred revenue account. when camp attendees attend, they are recognized against the deferred revenue account and moved over to a contribution account. Is this the correct way to record these? Thanks.

    • Gretchen Katko

      I have a piggy back question to the winter camp one. Are the sponsorships tax deductible for the donor even if they are earmarked for a specific camper? We have a special needs camp where the costs to attend camp are too expensive for most families. Grandparents and friends are contributing sponsorships and we are providing receipts for tax purposes but I have always been uncomfortable with this. What if the sponsorship was from the parent? Would this be a cheaper way to send all of our kids to camp?

      • Donations made to a specific individual are not tax deductible to the donor. If you solicit funds for the purpose of scholarships for all campers, those would be deductible. But if someone gives you money specifically for camper X, you can say, “Thanks!” but they won’t be able to take the deduction. More info here: http://www.irs.gov/pub/irs-pdf/p526.pdf, see page 6.

  6. June Holland

    So confused… how does a nonprofit handle the accouting for when a member reimburses the nonprofit booster club for an expense. (EX- the booster club bought a jacket for the member. The member reimbursed)
    Would the booster club credit the expense, or record as income?

  7. I would record both transactions as either income or an expense and wash it out.

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