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8 HB Fiscal Polices a Procedures <br /> TYPE 1 <br /> Revenue without Donor Contributions for which purpose or timing of use has not been restricted by <br /> Restrictions donors. Includes earned revenue and interest income. <br /> Contributions for which purpose or timing of use has been restricted by donors. <br /> May be further categorized as Temporarily or Permanently restricted: <br /> • Temporarily restricted contributions are grants/gifts which are received <br /> with donor stipulations limiting use of the contribution by time or <br /> Revenue with Donor purpose. <br /> Restrictions • Permanently restricted contributions are grants/gifts where the donor <br /> states that the donation must be maintained permanently but may <br /> permit the organization to expend part or all of the income derived from <br /> the asset. <br /> • Interest earned on an endowment may be purpose restricted by the <br /> donor(s) but is often unrestricted. <br /> Pledges, also called promises to give, are written commitments to contribute cash or other assets <br /> to the organization. <br /> Understanding - ., <br /> TYPE DEFINITION TREATMENT <br /> • Recorded as income at the <br /> Agreement to contribute does not time the pledge is made. <br /> Unconditional Pledge depend on the occurrence of a • Create an Allowance for <br /> specified future and uncertain Doubtful Accounts (5-1 0% <br /> event. of pledged revenue <br /> recommended). <br /> Not recognized as income. <br /> Agreement to contribute • Once the condition has <br /> Conditional Pledge dependent on the occurrence of a been met, the pledge <br /> specified, future, and uncertain becomes unconditional <br /> event. and is then recognized as <br /> income. <br /> Donor-imposed Restriction Limits the use of the contributed <br /> asset to a specific purpose. <br /> Specifies a future and uncertain <br /> event that must take place. If this <br /> Donor-imposed Condition event does not occur, the donor is <br /> released from the obligation to <br /> contribute assets. <br /> All pledges and promises to give, along with supporting documentation, are communicated to <br /> Finance on a Pledge Form. The Director of Finance, with assistance from the Donor Relations <br /> Manager, determines if the pledge can be recognized as revenue, either with or without <br /> restriction, based on GAAP guidelines. The documentation for promises to give must include: <br /> • The name of the donor <br /> Last updated September 2022 <br />