Overview: The end of a calendar year or fiscal year may cause unique situations where online giving transfers to your church's bank account contain transactions initiated by donors across both periods (for example, transactions from 2018 and 2019 comprise a transfer in January 2019). This article will provide a solution to this accounting need.
Most churches follow the principle (per USA IRS guidelines) that giving donations should be credited to a person on the date given, date mailed or date contributed (see this article from the IRS for more information). For online donations, the “date given” is considered the date the online giving form is completed. In Breeze, the date the online giving form is completed is the date recorded and will list on a giving statement.
For most of the year the date an online transaction is given doesn’t matter much as it is part of a transfer to the church's bank and deposit in the same year (see this article for how we recommend reconciling online giving). One time a year, a transfer (monies transfer to churches bank) may have to be split if transactions match a calendar years income total. Most likely December 31st, but it could also happen for some at the end of a fiscal year.
Here’s how to get the reporting you need! Split the Breeze transfer to your bank account into 2 separate entries in your accounting software, 1 transaction for all 2018 transactions and 1 for 2019. There are no adjustments that need to be made in Breeze. Although the 2 deposits in the accounting software should be noted that they are a split transaction based on the date of the gift for transaction reporting purposes.
With Breeze managing your online giving, it is very easy to view the donations that make up a given deposit into your bank account. Breeze will show you specific details relating to each transfer such as gross amounts, transaction fees, and net amounts. To view this:
- Navigate to "Giving" > "Online Giving."
- Towards the bottom of the screen click on the "Transfers" tab.
- Set your desired Filters (most recent will populate by default).
- click the "View Payments" link in the Details column, This will take you to the Payments Tab and will automatically set the filter for the specific transfer you clicked to view.
- Click Download as Excel.
- Open the Excel file.
Physical-transaction comparative that may be helpful in thinking through this accounting situation:
Mailed Donation:
Donor mails a check with a postmark of December 31, 2018. The church does not receive the check until January 7, 2019. The church deposits the check on January 7, 2019 in their bank and it clears the donor’s bank on January 9. The gift is deductible in 2018.
Online Giving Donation:
Donor gives online on December 31, 2018. The transaction processes and clears into Breeze within 2 days (credit/debit example) then transfers to the church bank account on January 4, 2019 (example based on Friday transfer setup). The transaction is reflected in the donor’s giving statement on December 31, 2018 and is deductible in 2018 (same would be true with a text gift).
This article is meant to explain online giving reporting/reconciliation and should not be considered legal or accounting advice. Please consult a lawyer or accounting professional for further assistance.
Resources:
https://www.irs.gov/pub/irs-pdf/p526.pdf
Zondervan 2020 Church and Nonprofit Tax and Financial Guide
Note: The fiscal year will always default to January 1 - December 31.