Configure Funds, Programs, Campaigns, Chart of Accounts, and Account Classes - READ ME FIRST

Configure Funds, Programs, Campaigns, Chart of Accounts, and Account Classes Overview

1. For many clients first setting up their CRM account, the concepts of and interrelation of funds, programs, campaign, chart of accounts and account classes can be confusing, but this is generally because, lacking a comprehensive donation/fundraising tracking system, they have been using their accounting/general ledger codes to track things that the fundraising hat cares about (such as if a donation is from an individual or an organization or if a donation was made in response to a particular fundraising campaign or appeal, etc.) in addition to the things the accounting hat cares about. Often, clients find they need to restructure their Chart of Accounts to simplify it to track solely accounting considerations as CRM covers tracking the fundraising considerations.
2. Funds are how your RESOURCE DEVELOPMENT/FUNDRAISING hat thinks about money.
   • Funds ONLY apply to DONATIONS/Gifts. Funds do not relate in any way to membership or event registrations.
   • Fund is a REQUIRED field when entering donations, so every donation record will be tied to a Fund.
   • Funds usually refer to how the donation is going to be used in a broad sense - general unrestricted operating money or restricted in some way? Funds are also used to separate money into different pools related to tax deductibility or ask amounts. The General Fund is usually for donations that are 100% tax deductible and unrestricted/to be used for general operating. If you have donations that are not 100% tax deductible, you will need to set up another fund to track those (an example of this would be to create a second fund for event sponsorships which are usually not 100% tax deductible). Ask amounts are also tied to the Fund; if you have pools of donations that have vastly different ask amounts, then you may want to create separate funds for them (for example, perhaps your general ask amounts are $25, $50, and $100, but for your Major Donor Campaign, your ask amounts are $250, $500, and $1000. You would create two separate funds to accommodate these two sets of ask amounts)
   • The majority of our clients have one fund: General [unrestricted]. For those clients with more than one fund, about 95% of them have only one additional fund for event sponsorships.
   • With Funds, less is more.
3. Chart of Accounts is your general ledger codes. Account Classes are related to QuickBooks and/or can be used to track sub-account general ledger code designations. These are how your ACCOUNTING/CFO hat thinks about the money.
   • In CRM, the chart of accounts/general ledger codes can be tied to donations via fund, program, and/or campaign designations. For membership and events, the chart of accounts is tied directly to the membership level configuration and the event set up/configuration respectively.
4. Programs are the programs and services you offer to your constituents. Additionally, programs is what you plan to spend the money you raise on. So, for instance, if a donor makes a donation and wants it earmarked to be used on your youth arts program, "youth arts" would be configured as a program inside CRM. "General Operating" or "Admin" can be configured as a program as well if need be (though not generally necessary). Donations, Grants, and Events/Event Registration fees can be tied to programs.
5. Campaigns are a what one generally thinks of when they think of a traditional fundraising campaign (think Public Television Pledge Drive). A campaign can be a single item - such as annual appeal - or a complicated, large fundraising effort involving many moving parts (such as a capital campaign that may have fundraising events, pledges, individual donations, matching grants, and more). Donations and membership fees can be tied to campaigns. Annual Appeal and Giving Tuesday are two common campaigns that clients configure in the system.
6. Gift Sources are the physical way in which a donation reached you, such as in person, online, or in the mail.
7. Solicitation Method (not an out of the box configuration, but one you can add to the Gifts Additional Information custom data set) is the particular appeal that the donor responded to - did they respond to your Facebook post, your spring e-newsletter, your fall annual appeal letter, etc.
8. Here is a screen shot of the Add Gift screen in CRM. From here, you can see that Gift Source, Fund, Program, Campaign, and Event are all trackable very easily inside CRM and there is no need to use General Ledger codes to track or pull reports based on this information.

   

9. Additionally, at the bottom of the Add Gift screen, we have added fields to the Gifts Additional Information section to track Solicitation Method, if a donation is from a Donor Advised Fund, and if it's a matching gift. You can add whatever tracking fields you want to this area.

   

10. From the above, you can see it is unnecessary to have general ledger codes tied to anything the fundraising hat cares about tracking - solicitation method, gift source, donor type (individual versus organization or foundation versus private company), fundraising campaign - because these things already have a way of being tracked (and reported on) in CRM that isn't tied to GL/chart of account codes. Instead, your general ledger codes should just be concerned with broad categories of accounting hat revenue and expense lines - things like "revenue from grants," "revenue from event registration fees," "revenue from merchandise," revenue earmarked for "adult education program operating expenses," or "youth program summer camp," etc.
11. Most clients approach the process of laying out their CRM fund/campaign/program/chart of account/account class configurations by creating a list of their current chart of accounts and account classes in a spreadsheet, which might look something like the images below.

    

    

    

    

12. As you can see, there are a lot of account codes here - many of which are unnecessary. For example, we see that each event has multiple general ledger codes assigned to it to track the various revenue streams coming from that event. However, your accounting hat usually doesn't care WHICH event revenue came from. It cares, instead, about distinguishing broad categories of revenue, such as revenue from event sponsorships (regardless of event) versus revenue from event merchandise sales versus revenue from event ticket sales.

    

13. As you can see here in this screenshot, there are multiple general ledger codes for the same TYPE of revenue (event sponsorships) because every event has been assigned its own set of general ledger codes. This tends to happen because the organization was using general ledger codes to enable them to create fundraising reports (get a grand total roll up revenue report by event). However, this is not generally the correct usage for general ledger codes, and in CRM, users can create these kinds of reports without the general ledger codes. Reports can be created on type of revenue ("show me all the money I've raised from donations versus all the money from event registrations"), by event ("show me all the money I raised from my Golf Tournament including tickets, merchandise, silent auction, and sponsorships"), by program ("show me all the money I've raised from events, donations, and grants for my youth program"), and more without use of general ledger codes.

    

14. Here, too, we see that general ledger codes have been assigned to various fundraising appeal/solicitation methods. The accounting hat generally does not care in the least HOW the donor was asked for money, only that this money belongs in the broad "donations" bucket of revenue. The fundraising hat is the one that cares about the solicitation method, and without regard to general ledger codes, the fundraising hat will be able to pull reports from CRM on the specific solicitation that a donor responded to without solicitation method being tied to general ledger codes.

    

15. Next, we see that this chart of accounts list includes expense items. CRM does not track expenses, only revenue (your accounting hat is the one that cares about expenses and those are tracked in your accounting software). You can delete these GL codes off your list of GL codes you are attempting to map to CRM as there is no where in CRM that they come into play.

    

16. If you find that your general ledger codes/chart of accounts look like the ones above, then we strongly recommend cleaning up, consolidating, and streamlining your general ledger codes prior to adding your chart of accounts to CRM or migrating your revenue data to Fundly.
17. Keep in mind, as well, that CRM only tracks revenue from donations, membership fees, event tickets, and event merchandise. Other kinds of revenue, such as e-store/general merchandise, consulting, and rental fees generally are not trackable in CRM and you would simply track that in your accounting software.
18. It can be helpful when cleaning up your chart of accounts to list the broad category each item in your list falls into. Here, we have deleted all the solicitation method and general expense items from the list. For what remains, we have added a "Category" column to help us identify what type of revenue we're dealing with.

    

    

    

19. We can then clean up our GL codes by consolidating, for example, all event ticket revenue into one general ledger/chart of account code, all unrestricted donations into one GL code, all event sponsorships into one GL code, etc.
20. Once you have ensured your chart of accounts is tracking just "accounting stuff" (and not fundraising hat or program manager stuff), you are ready to map your GL codes to CRM funds, programs, and campaigns. Start by looking at your list of chart of accounts you have put into your spreadsheet. Are any of these chart of accounts items tracking event registration fees, event merchandise sales, membership fees, revenue from rental income, consulting or speaking fees, or other types of revenue not meant to be tracked in CRM, and/or grant revenue? If so, remove them from the list. Funds, programs, and campaigns only apply to donations (programs can be tied to Grants as well).
    • Note: some organizations host events in which admission is granted in exchange for a suggested donation amount, rather than charging a straight event fee. Similarly, some organizations grant membership benefits in exchange for a suggested donation amount. Please read our FAQ on this practice (the same reasoning applies to events as applies to memberships on this topic). We don't recommend it for the reasons stated in the FAQ. However, if you do have events/memberships that operate this way, then keep in mind you will be tracking the revenue in the donations module and will need to tie the general ledger/chart of account codes to the donations and not the event registrations and/or memberships.
21. Here, we present the cleaned up list with all event expense items, expense items, event merchandise, event tickets, memberships, other revenue, and general merchandise removed. As you can see, this is now much easier to deal with!

    

    

22. Next, look at the remaining chart of accounts that you want to tie to donations (add a column to your spreadsheet for "Fund"). List what fund the various types of donations will go to - this will be mostly "general fund" or some kind of broad unrestricted/general operating donations category, such as your general fund. As described in #2 above, "Funds" is the broad "fundraising hat" categorization of donations. The only reason to create more than one fund is if you have money with different tax deductibility or different ask/giving levels. In the example below, we have identified that auction purchases need their own fund (different tax deductibility/not 100% tax deductible donation), and event sponsorships need a fund (also not 100% tax deductible and different ask levels than our general/unrestricted donations). We have also decided to create a separate fund for donations to our capital campaign as those donations ARE restricted/not for general operating. However, you can see that we have both in-kind and cash donations both going into our general fund - that is okay. Those donations are all "unrestricted"/general operating related so they can go to the same fund even though they are different kinds of donations.

    

    

23. When you configure your Funds now, you can simply add the correct GL code to the Fund configurations (see our tutorial on configuring funds for more information).
24. Now look at your list - do you have two or more chart of accounts tied to the same fund? Each fund can only have one chart of account tied to it. Here, in this example, we are reverting back to our first list of GL codes. Let's assume we've decided to keep this very granular list of GL codes. Here, in this screen shot, we can see that because of this, we  now have two GL codes going to the same Fund.
    

    

25. If you have two or more chart of accounts tied to the same fund, you will need to tie some or all of those general ledger codes to programs or campaigns instead. For example, in the example above, let's say that, for whatever reason, we are keeping our old "down in the weeds" general ledger codes where we have different GL codes for donations raised for different events. We want all this money to be tied to our general/unrestricted donations fund, but we need a way to have several different GL codes assigned to donations going into that fund. In this case, we would then need to set up each event also as a program or campaign and assign the event donation GL code to each program/campaign.
    
    • When entering a donation into CRM, you can tie that donation to a fund and also a program and/or campaign and/or event.
    • The chart of account/general ledger codes are tied to the fund, program, and/or campaign, and from them, assigned to the donation (that is, you cannot manually enter a chart of account/general ledger code to a donation transaction. The system assigns the chart of account to the donation/transaction from the fund, program, and/or campaign).
    • The system uses a hierarchy to assign the chart of accounts to each donation as follows:
      • does the fund assigned to the donation have a chart of account attached to it? If so, that chart of accounts is used.
      • if not, does the donation have a program designation? If so, does that program have a chart of accounts attached to it (in the program configuration/set up)? If so, that chart of account is used.
      • If not, does the donation have a campaign designation? If so, does that campaign have a chart of account attached to it? If so, that chart of accounts is used.
      • If not, the system uses the fallback chart of accounts code for that revenue category (for donations, the fallback/default GL code assigned to gifts/donation revenue).
      • If no fallback/default revenue source assigned, no chart of accounts is assigned to the donation.
26. In those cases where you plan to have two or more chart of accounts tied to the same fund, you will need to reassign those chart of account codes to the program and/or campaign that will be assigned to donation. In this way, even though the two donations would have the same fund, they will have different programs and/or campaigns and the GL code will be assigned from the campaign and/or program (in that order) tied to the donations. Here, in our sample chart of accounts mapping file where we have very granular general ledger codes, we have added columns for Program and Campaign to help us map this out. In those cases where two or more GL codes are trying to go to the same fund, we need to set up a program or campaign that we would add to the donation record so that the system will pull the GL code from there instead of from the Fund. In this example, our Doggie Challenge is more of a campaign than a program, so we will set up a campaign and assign it the "4111" GL/chart of accounts code. Now, when we enter any donations and tied them to the Doggie Challenge campaign, they will get GL code 4111, regardless of what program or fund the donation is also tied to. Alternatively, we could assign "4111" as an account class (sub account) and link that class to the Doggie Challenge campaign (with no account code). Our donation would then get the account class from the Campaign and the Chart of Accounts from the Fund. It would have general ledger code 4300 from the fund and 4111 for an account class from the Campaign. This, in fact, would be a better option as you'd be combining a more broad set of general ledger codes but also capturing the very granular data as well.
    

    

27. If we really needed our Fashion Show event sponsorships to have their own GL code (separate from other event sponsorship codes), we could create a program for the Fashion Show. When entering these donations, they will get GL code 4114 as long as we tie the donation to the Fashion Show program, regardless of Fund and as long as we don't tie the donation to a campaign (or, at least, a campaign that has it's own GL code as Campaign ranks higher in the assignment hierarchy than program). As above, alternatively, we could just assign the campaign an account class of 4114 and allow the Fashion Show sponsorships to still get chart of account code 4300 (donations) from the Fund's chart of accounts.
    

    

28. However, as you can see this screen shot, we quickly get ourselves into a corner going this way. How can we assign a different, third GL code or account class to Fashion Show donations? We'd either have to allow the Fashion Show donations to go to the General Donations Fund's GL code (4300) or we'd have to create yet another campaign or program. This will get messy, very quickly and result in us having many funds, programs, and/or campaigns. This is why it is better to revamp the Chart of Accounts/general ledger codes and consolidate down into broad buckets of revenue type, rather than assigning different codes for every event, activity, fundraising appeal, etc. However, we recognize that this is not always possible. In such cases, just expect that you will have an unusually large number of programs, campaigns, and possibly even funds to accommodate these very granular/drilled down chart of accounts.
    

    

29. If you need help thinking through how to map your GL codes/Chart of Accounts to CRM funds, programs, and campaigns, our staff are always happy to review your mapping sheet and/or talk through any questions you have. Trust us, it's much easier to make sure these codes and this mapping is laid out correctly from the get go than to try to update records and consolidate funds and such after the fact. Don't hesitate to reach out to us at support@fundly.com with any questions!