Q: We are planning the launch of our first multisite campus, including a central accounting hub. Is there anything we need to know? Let’s explore best practices for accounting for multisite churches.
How Should Donations Be Tracked Across Campuses?
Tracking donations by campus is essential. This creates “cost centers” for generating financial health reports for each location. However, it’s crucial to address how to handle mailed-in checks without campus preference and ensure donors can update their campus affiliation. Robust software can help prevent reporting errors caused by donor transitions.
What Are the Implications of Donor-Restricted Funds?
Designating gifts to specific campuses creates donor-restricted funds. By law, these funds must be used exclusively for the designated campus. Using funds for other purposes could result in legal violations. Communicate clearly that all gifts go to the church’s general fund and campus preference is used for reporting only.
What Communication Strategies Should We Use?
Ensure your team, including preachers and communications staff, delivers consistent messages. For example: “All gifts support the church’s general fund. Campus preference helps us understand financial health.” Monitor language on websites and publications to avoid unintended donor restrictions.
How Can Multisite Churches Maintain Compliance?
- Develop clear policies for tracking donations and expenses by campus.
- Inspect financial reports regularly to ensure accuracy.
- Train staff on legal requirements for donor-restricted funds.
FAQs
1. Why is tracking donations by campus important?
It provides insights into financial health and allows each campus to work toward self-sustainability.
2. Can donor-restricted funds be reallocated?
No. Legally, funds must be used for their designated purpose. Reallocating them violates donor intent and the law.
3. What are cost centers in accounting?
Cost centers track income and expenses for specific locations, enabling detailed financial reporting.
4. How can software improve campus accounting?
Advanced accounting software can accurately allocate donations and provide detailed reports by campus.
Final Thoughts
Multisite churches face unique accounting challenges. By tracking donations accurately, complying with donor restrictions, and communicating clearly, you can ensure financial health and legal compliance. For more resources, visit Church Law & Tax.
