Undesignated Gifts

Protocol for Undesignated Gifts received by Pine Street Presbyterian Church

Background
This protocol was developed in response to the lack of an established procedure for dealing with Undesignated Gifts. The goal of the protocol is to allow the faith community to see that these Gifts exist, determine which Gifts are undesignated, establish how the Church will hold the funds, institute an allocation process for determining how the funds are to be used, and provide a structure for the expenditure to take place.

1. Definitions
   For the purpose of this protocol, Gift shall be defined as any and all income, monies, cash receipts or gifts, in-kind gifts, grants, or any other type of revenue received by Pine Street Presbyterian Church (Church). As a subset of Gifts, Undesignated Gifts shall include the following: (i) any Gift that is not a pledge payment, memorial gift or reimbursement, or revenue that is not otherwise designated for a specific and definitive purpose; (ii) all Gifts that have a designation implying use for “general purposes or operations” of the church; (iii) any Gift that carries an instruction or designation to exclude a certain use or uses (for example, if a Gift is received that forbids use toward the purchase of heating fuel and paper, but otherwise has no use restrictions.). In the event a Gift is received with ambiguous and/or incomplete instructions or designations as to its intended use, it shall come before Session for a determination as to its status.

Receipt and Management
When an Undesignated Gift is received by the Church in the form of cash, it shall promptly be placed in an interest earning, permanent special fund (UG Fund) created by the Treasurer and supervised/managed by the Board of Trustees. In the event the Gift is in a form other than cash, such as stock, other personal property or real property, it shall promptly be converted to cash by the Board of Trustees and immediately placed in the UG Fund. The UG Fund shall be managed in a way that preserves the principal balance and anticipates only one annual distribution to maximize the interest earned thereon. In the event an Undesignated Gift is received that excludes a certain use or uses, it shall be placed in a sub-account of the UG Fund to ensure that it is not used for the excluded use or uses. As part of its monthly report to the Finance and Administration Committee (FAC), the Treasurer shall provide a year-to-date report that itemizes all Undesignated Gifts.

Announcement of Available Funds for Allocation
Each January upon the close of the Church’s prior year books, the Treasurer shall release to FAC the full principal balance(s) of the UG Fund and any related sub-account(s) as of December 31st of the prior year. The balance(s) shall include any interest, fees or appreciation earned thereon. FAC shall divide the year ending principal balance of the UG Fund and any sub-account by three (3) and announce the combined result to the congregation as the Available Funds for Allocation (AFA) for the next fiscal year, noting the amounts of any exclusions. FAC may use an estimate of the AFA, as agreed to by the Treasurer and FAC, prior to the close of the Church’s books to ensure that the announcement is made as early in the year as possible. Any estimate should understate the anticipated AFA.

Application Process
Any individual, group of persons or entity associated with the faith community of the Church may submit an application to receive a portion of the AFA. The broad description of qualifying applicants is intended to be as inclusive as possible since God can call anyone into service.

FAC shall make an application readily available in both electronic and hard-copy form that will undergo periodic revisions as deemed necessary. At a minimum, the application shall include the following information: (i) the name of the person(s) or entity submitting the application (Applicant); (ii) the contact information for the Applicant; (iii) a detailed description of how the funds shall be used; (iv) the amount of funds requested, along with an itemized list of anticipated expenditures; (v) the time period in which the funds will be used; (vi) an explanation of how God will be served/glorified and who will be touched/impacted as a result; (vii) name of board, committee, or task force who will be responsible for oversight of the Applicant’s program or project, and to whom the Applicant will report on a monthly basis; (viii) signature of chair of the board, committee or taskforce that agrees to oversee the purchase, program or project; (ix) an explanation of how the purchase, program or project is consistent with the strategic plan of the Church.

Applicants must complete all aspects of the application and return it to FAC prior to March 31st of each year.

Clearinghouse and Allocation Functions
FAC shall act as a clearinghouse for all applications. Clearinghouse responsibilities shall include collection of the applications, evaluation of each for completeness and compliance with the information requested, recommendation on the ultimate allocation, and submission of the applications and recommendations (including notations of exclusions) to Session prior to the April Session meeting.

Session shall decide on an allocation of the available funds prior to the expiration of its then current term on May 31st of that year. Session should avoid any allocation that is contrary to any exclusion of use(s) that may apply.

Budgets and Accounting Recognition
Once Session has made its allocation, FAC shall include the amounts in the respective budgets of those boards, committees, and task forces that are responsible for the oversight of the purchase, program or project. Session should strongly refrain from removing any such allocations from the budget during the budget approval process.

On the first business day of the following January, the Treasurer will direct the UG Fund and its sub-account(s), if any, to be debited by the amounts allocated by Session in the prior year. To avoid the proliferation of sub-accounts, the debits should first be made to any sub-account(s) of the UG Fund, as exclusion may allow, and then from the primary UG Fund. Corresponding credits should be made under the restricted funds account for the coming year to reflect the allocation made by Session.

Expenditures
After the allocation has been placed in the respective budget of the board, committee, or task force that is responsible for oversight of the applicant’s purchase, program or project, no other authorization shall be necessary for the approved expenditure of funds. However, the entity responsible for oversight may deny or temporarily suspend the expenditures of an applicant in the event they are inconsistent with the description provided in the approved application. All requests for payment shall be made through the entity responsible for oversight.

Assumptions
The Protocol described below shall have a retroactive commencement date of January 1, 2007. However, no Announcement of Available Funds, Application Process, Clearinghouse and Allocation Functions, Budgeting and Accounting Recognition or Expenditures shall have occurred for the fiscal years of 2007 and 2008. These portions of the protocol shall begin in 2008 for the 2009 Fiscal year. The Definitions and Receipt and Management of Undesignated Gifts shall remain unchanged and shall be deemed to be in place since January 1, 2007.

The above protocol is a repetitive process that repeats itself on a twelve (12) month cycle, with the exception of Expenditures, which each have a specified time period.

Limiting Conditions
Any material change to this protocol must first be approved by Session. Session shall have full and complete discretion on how the funds are to be allocated. Nothing contained herein is intended to change, limit or usurp that authority.

Protocol developed by: Finance and Administration Committee

Date of Session Approval of Committee Motion: January 15, 2008
To download the application as a PDF file click here