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What's the difference between donations and pledges?

If you enter contributions as either Donations (Sales Receipts), or as Pledges (Invoices) instead of as Deposits, the information in your QuickBooks reports will be more useful.

Choosing which form to use

  • Select the Donation form when you receive cash, checks, or credit card donations.

    Note: QuickBooks processes donations in the same way that it processes Sales Receipts. If your Sales & Customers preferences are set to "Use Undeposited Funds as a default deposit to account," you will not see Deposit To on the donation form, and your donation checks will automatically be added to your Undeposited Funds account. In this case, remember to create a Deposit transaction to move funds from the Undeposited Funds account into your checking account. Otherwise, you apply donations immediately by clicking your checking account in the Deposit To drop-down list on the donation form.

    If you track donations with classes, select the appropriate class in the Class field or type Other. If a donation has been designated for more than one class or fund, calculate the amount of the donation for each class and enter a separate line item for each portion of the donation (or create a separate donation form for each). If, for example, you receive $200, and the donor specifies that half of the donation go to the Building Fund and half to the Outreach fund, create a donation (sales receipt), and enter one item for $100 (choose Building Fund as the class), and then enter the second item specifying that the remaining $100 goes to the Outreach Fund (class). You could also create separate donation (sales receipt) forms for each portion of the donation.

    In the Customer Tax Code menu (in the bottom left corner of the Donations form) select Non-Taxable Sales for standard donations.

  • Select the Pledge form when you receive a pledge (promise) of a future payment. When the donor sends a payment, use the Receive Payments form to link it to the corresponding pledge. Use the same procedure for partial payments; QuickBooks will keep track of how much of the pledge has not yet been paid (using the Balance Due field below the total on the pledge).

Setting up items for donations and pledges

To enter donations (sales receipts) and pledges (invoices) in QuickBooks, set them up as items. An item tells QuickBooks which account to associate with each line on a donation or pledge.

To do this task

  1. Go to the Lists menu and click Item List.

  2. Click Item at the bottom of the list and click New.

  3. Select Service for the Type and select the corresponding account for Account.

  4. Choose a name that matches the corresponding account.

    For example, if you are setting up an item for the Individual Contribution account, name your item Individual Contribution.

See also

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