How to Record Donations Restricted by Donors for a Capital Campaign Building Fund
Recording donations received during a capital campaign that are restricted by donors for the construction of a specific facility.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash (Restricted for Capital) | Asset (+) | 100,000.00 | - |
| Contribution Revenue (With Restrictions) | Revenue (+) | - | 100,000.00 |
💡 Accountant's Note
Capital campaign funds are restricted until the building is built. Restrictions are released as construction costs are incurred.
Practitioner & Systems Framework
💻 ERP Architecture
Maintain a dedicated restricted cash account for capital campaign funds — never commingle with operating cash. Track cumulative pledges received vs. outstanding vs. written off in a campaign ledger. As construction progresses, release restrictions and recognize expenditure. Once the building is complete, continue releasing restrictions as depreciation is recognized on the asset.
⚠️ Audit Flags
Auditors verify that capital campaign funds are used solely for the specified project. Any use of capital campaign funds for operations (even temporarily) requires donor consent and disclosure. The restriction release schedule must match the construction draw schedule or, post-completion, the depreciation schedule.
📄 Required Documentation
Donor pledge agreements confirming capital restriction, separate restricted cash account, campaign progress report, construction contract, draw schedule, release-from-restriction schedule, and post-completion depreciation schedule.
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Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.