Discussion:Nonprofit - Revenue versus pass through

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Discussion Forum Index --> Accounting Questions --> Nonprofit - Revenue versus pass through


Orange2 (talk|edits) said:

14 March 2013
I have been trying to research whether my nonprofit has a revenue contribution or pass through. I've finally obtained the contract. For those familar with nonprofits, I am trying to determine if we have "hot potato" with a contribution. Whose revenue is it. Are we just the intermediary entity.

Scenario: Very large U.S. nonprofit collects food supplies; we receive it; and give it to a group in Honduras who works with the children in need. If we were to collect funds here in the US, we would give them to this Honduras entity

My nonprofit booked it as revenue and expense. While there is no bottom line effect, it is more than 50% of our revenues so this sets a presedent.

Positive: the contract does state that we have permission to administer the shipment to the most beneficial program (so they allow the consignee to have variance power)

Negative: The "contract" (which is just a letter of donation) lists both our entity and the final recipient entity as consignees. Doesn't this present a problem because it really isn't variance power for our entity. Say we wanted to give it to a group in Asia instead of Honduras. I have been thinking all along that we are just a pass through - it is donated supplies and a liability until we deliver. Can someone give me thoughts on this?

Natalie (talk|edits) said:

April 3, 2013
It sounds like a restricted donation to me. I'm not sure what implication co-consignees have on the transaction, however.

Garrettwagner (talk|edits) said:

17 May 2013
I would agree with Natalie that it wounds like a restricted donation. If a person gave them a million dollars to be spent on a specific group in Honduras who worked with children, we would record that as a TR donation and debit cash and then record an program service expense when paid.

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