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Initial try at writing up a fund accounting use case.

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Bradley M. Kuhn 2013-11-06 08:52:42 -05:00
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UseCases.mdwn
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- [[GeneratingReports]]
- [[Collaborating]]
- [[Fund Accounting|UseCases/FundAccounting]]

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# Fund Accounting
Many non-profits, in particular a
[fiscal sponsor](http://en.wikipedia.org/wiki/Fiscal_sponsorship), use some
form of [fund accounting](http://en.wikipedia.org/wiki/Fund_accounting) to
handle accounting tracking of income and expenses for specific projects, or
funds.
In fiscal sponsors, these funds are typically classified by auditors and/or
accountants as "temporarily restricted assets", and spending of the assets
are governed by a fiscal sponsorship agreement
([[see examples below|FundAccounting#Other_Resources]]).
## Fund Report
The "fund report" is a shorthand name for a Temporarily Restricted Net Assets
Report. This report shows the temporarily restricted income, expenses and
assets. (An example of such a report can be found on page 6 of
[Conservancy's FY 2011 Audited Financial statement](http://sfconservancy.org/docs/conservancy_independent-audit_fy-2011.pdf).)
## Subset of the Books
Ultimately, any account system that truly supports fiscal sponsorship must
provide all functions, reports, editing, interaction and viewing to allow a
user to view a "subset" of the books that are specific to any given fund. In
essence, the books of a fiscal sponsoring org are proper superset of all the
books of its projects.
Thus, an individual project contributor wants to:
- View the books for that project as an independent set, unencumbered by
transactions for other projects.
- [[Generate reports|UseCases/GenerateReports]] for that project's financial
data, and have those reports only include data specific to that project.
The non-profit administrators want to:
- View the entire set of books for the organization, treating all income,
expenses, and assets as belonging to the entire org, and only seeing the
differences treating the project funds merely as "temporarily restricted
assets".
- Be able to perform operations that span the entire books, such as
reconciling bank accounts that are contain funds temporarily restricted for
different projects.
## Other Resources
### Examples of Fiscal Sponsorship Agreements
- [[Software Freedom Conservancy's fiscal sponsorship agreement template]](http://sfconservancy.org/members/apply/ConservancyFSATemplate.pdf)
- [[Insight Center for Community Economic Development fiscal sponsorship agreement]](http://www.google.com/url?q=http://www.insightcced.org/uploads/publications/legal/721.pdf&sa=U&ei=4UR6UuCONNSrkQfz5YDYCw&ved=0CCAQFjAC&usg=AFQjCNG8usFKh8jSdMM9cG1SAOVUb2Neig)
More about [fiscal sponsors from the National Council of Non-Profits](http://www.councilofnonprofits.org/resources/resources-topic/fundraising/fiscal-sponsors).