Acctg for decision making

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Acctg for decision making

June Before us are some issues about accounting and reporting for "Pledges" made to Ministries Below is our 'spin' on such matters.

Preface A number of Ministries seek a financial commitment from their constituents for a variety of needed purposes. Some Churches fund their Missions budget via this process. The Ministry usually tracks how the constituent is doing compared to their commitment.

Acctg for decision making

Within the context of our discussion here, there are a number of ways such things are handled, but, in our opinion, there are two basic financial commitment Pledges types.

Type One The donor makes a pledge, or promises to pay xxxx dollars at a certain time over a period of a year, or more.

Evidences of Type One pledges include such practices as: They virtually send out bills by reminding the donor of unpaid pledges; If pledges are not made as promised, I am told they could even apply legal pressure which seems kinda unwise from a public relations perspective.

Type Two The donor makes a contingent pledge. This donor promises to trust the Lord for the needed funds with which to pay this commitment as the Lord provides these are often called Faith Promises.

Evidences of this type of agreement include: Occasionally the agreed amounts appears within the DonaMail records; But the Ministry seldom sends a reminder because the Ministry knows that the amount of Faith Promise giving is between the donor and the Lord.

We interpret them as follows: The above Type One pledges should be recorded as tangible assets on the Ministry books; including the necessary "Bad Debt, or uncollectible" steps.

See below as to Pledge Reporting issues. Pledge Reporting As expressed Herewe strongly believe that the Ministry Finance Team needs meaningful and complete operational data for daily finance decision making.

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But, in our judgment, Pledge Receivable net of any allowance for Bad Debts information is basically for annual reports to the Ministry's public, or to it's constituency.

Recording and reporting of pledge income during the year is unnecessarily complex and not a helpful management tool for the Ministry Finance Team. Further, in our judgment, the annual reports should show the Unpaid Pledge Income as a separate income line and not be commingled with Donation Income.Temporary Early Retirement Authority.

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Acctg for decision making

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