Increase in Charitable Giving

Despite increases in gasoline prices and other necessities, Americans found a way to give 2.7 percent more to charitable causes last year than in 2004, according to a report by the American Association of Fundraising Counsel. Experts say the increase was propelled by a series of significant natural disasters including Hurricane Katrina and the tsunami in Southeast Asia, The New York Times reported in June

How are these types of contributions to be recorded, in accordance with generally accepted accounting principles?

When contributions are soliciated for designated projects or events, FAS #116 requires that these contributions be reported as either:

1.Restricted contributions and then “released to unrestricted” with the donor restriction has been satisfied or

2.Unrestricted contribution if the restriction was satisifed in the same period as receipt and if the account policy disclosed this fact.

For additional information, see FAS116.