Specific donation accounts are set up for funds donated by way of gift to the University (or a Department) for a specific purpose excluding:
- a contribution to the construction of a building
- funds which are required to be held as an endowment
A separate Source of Funds should be set up for each distinct purpose, so that the application of funds to the specified purpose can be tracked and, if necessary, reported to the donor(s). Multiple gifts contributed to an appeal for funds to be applied for a specific purpose can be combined in a single Source of Funds. Donation accounts can also be spread over multiple Cost Centres and even Departments if appropriate.
Donations here exclude grants, which have some similar characteristics. Specific grants are dealt with in J sources of funds
The specific purpose referred to is a restriction imposed by the donor(s), rather than a purpose to which an unrestricted gift has been allocated by the Department or by the University. Funds arising from unrestricted donations are dealt with in Sources of Funds EFAA to EYZZ.
Exclusion of endowment funds
Where a donor specifies that a gift is to be retained and invested for the longer term to generate income, this form of restriction creates an endowment. Endowment funds may also exist where the funds donated with a specific restriction are so large in relation to the area of spend to which it relates that it will inevitably need to be retained over a lengthy period – five years is a useful cut-off point. Most of the endowment funds in the University are trust funds with regulations (see K sources of funds); any others should be set up as I sources of funds.
For the avoidance of doubt, the following is a list of attributes / exclusions of a specific donation accounted for as an H Source of Funds:
- Is receivable as a donation or gift.
- We know that the donor has placed restrictions on the spending of this donation.
- Not a grant (as defined under J sources of funds).
- Not funding for research activity (which should be notified to Research Operations).
- The gift is not a contribution to the costs of a building project (P sources of funds).
- Not received as part of a contractual relationship (as in trading – see G sources of funds).
- A trust fund has not been / is not being established.
- The donor has not specified that the gift is to be invested for the longer term, nor is it practically inevitable that the gift will be retained for at least five years.
Restricted funds, such as the balances on specific donation accounts, which are available for a specific activity should be applied to that activity before any general departmental or institutional funds are applied.
In financial statements from 2015-16 onwards H Sources of Funds will be included in restricted reserves.