University of Illinois System
Policies & Procedures

11.6 Accounting for Fundraising and Development Expenses

Policy Statement

Units must ensure that fundraising and development expenses (i.e., costs incurred to solicit and obtain gifts from donors) are properly accounted for within Banner.

Reason for the Policy

To ensure fundraising and development expenses are properly accounted for within Banner, which allows:

  • The University of Illinois Foundation to analyze and evaluate the University of Illinois System’s fundraising and development efforts, and
  • These fundraising and development expenses to be properly excluded from the University of Illinois System’s Indirect Cost Study.

Applicability of the Policy

All units who incur fundraising and development expenses.

Procedure

To ensure that fundraising and development expenses are properly accounted for in Banner, refer to the guidelines and procedural steps below:

  1. Identify all fundraising and development expenses incurred that are directly tied to overt donor solicitation efforts.  Examples include, but are not limited to:   

    1. Personnel costs (such as salaries and benefits) for development officers or any other individual who is materially participating in fundraising efforts;

    2. Development office operating expenses, such as: staff travel, staff training, staff equipment, office supplies, stationery, and printed materials used in fundraising efforts.

    3. Expenses to publicize and conduct fundraising campaigns;

    4. Expenses for direct mailings that solicit donations; 

    5. Expenses incurred in cultivating donor relationships and soliciting gifts from potential donors (such as the cost of a meal with a potential donor);

    6. Expenses incurred for major donor cultivation events, development campaign meetings, or development committee events; 

    7. Expenses incurred in acknowledging gifts and providing stewardship services to both current and prospective donors; and,

    8. Expenses for holding fundraising events such as fundraising galas, silent auctions, ad hoc fundraising events (e.g., t-shirt or bake sales), etc.

  2. Identify expenses related to advancement, alumni relations, and public affairs activities to ensure that these costs are not classified as a fundraising or development expense.  Since these costs are not related to direct donor solicitation efforts, they should not be factored into the analysis of fundraising and development efforts.  Examples include, but are not limited to:  

    1. Expenses to publish a monthly alumni relations magazine or an annual departmental newsletter where the primary purpose of the publication is to maintain positive alumni relations;

    2. Expenses to organize and host reunion events throughout the year (such as during homecoming) for alumni and/or retired employees.

  3. Ensure all fundraising and development expenses are properly accounted for within Banner using an appropriate C-FOP string by following the guidelines below:

    1. Fundraising and development expenses may be charged to a variety of fund types, such as state, indirect cost recovery (ICR), administrative allowance, gift, or endowment income.  Determining how to account for these fundraising and development expenses varies depending on the type of fund used.

    2. If the fundraising and development expenses are charged to a fund type that utilizes unique program codes (such as state, ICR, or administrative allowance, then a unique program code containing the following characteristics must be used to account for these expenses:
      (i) a title containing the word “Fundraising”;
      (ii) an assigned Banner A-21 attribute code of “UFR” (Unallowable Fundraising).
      UAFR will ensure all proper coding is assigned to the new program code in Banner, as long as the related Banner Fund, Program, Index Code Request Form clearly states that the new program code will be used to account for fundraising and development expenses.

    3. If the fundraising and development expenses are charged to a fund type that utilizes generic program codes (such as gift or endowment income), then a unique fund code containing the following characteristics must be used to account for these expenses:
      (i) a title containing the word “Fundraising”;
      (ii) an assigned Banner A-21 attribute code of “UFR” (Unallowable Fundraising).
      UAFR will ensure all proper coding is assigned to the new fund code in Banner, as long as the related Banner Fund, Program, Index Code Request Form clearly states that the new fund code will be used to account for fundraising and development expenses.

  4. Provide an adequate amount of funding or expense budget to the applicable fundraising C-FOP accounting string within Banner to ensure that no deficits exist by the end of the fiscal year.  Follow the guidelines below to ensure this funding is provided using the proper accounting methods:

    1. To provide funding for fundraising and development expenses that posted to a state, ICR, or administrative allowance C-FOP, complete a Budget Adjustment Request (BAR) Form, requesting a temporary budget exchange from another state, ICR, or administrative allowance C-FOP to the fundraising C-FOP. Submit the completed form to the applicable university Budget Office for review, approval, and processing.

    2.  To provide funding for fundraising and development expenses that posted to a gift or endowment income C-FOP, process a funds transfer via a journal voucher, following the guidelines listed below:
      (i) Debit (+ Plus) an appropriate gift or endowment income fund and credit (- Minus) the fundraising gift or endowment income fund, using a 104 rule code and the 417001 account code on both sides of the entry.  See Processing Fund Transfers Between Gift Funds for further guidance.  
      (ii) Debiting an unrestricted gift or endowment income fund is a common and allowable funding source for fund transfers into a fundraising gift or endowment income fund.
      (iii) Debiting a restricted gift fund for these types of transactions may be allowable in certain circumstances.  For example, if a restricted gift fund contains non-gift revenue in the 303242 account code, where the non-gift revenue was generated from a fundraising event (e.g., a silent auction, t-shirt sales, bake sales, etc.), then that restricted gift fund could be debited for an amount up to (but not exceeding) the total non-gift revenue within the 303242 account code.    
      (iv) Note: Fund transfers from/to a gift fund (fund type 4M) to/from and endowment income fund (fund type 4J) are unallowable.

Related Policies and Procedures

13 Accounting

Additional Resources

Completing Fund Transfers Between Gift Funds
Overview of Banner Program Codes & NACUBO Function
Banner Fund, Program, Index Code Request Form
Budget Adjustment Request (BAR) Form
Budget Offices
Gift Funds

Last Updated: March 21, 2023 | Approved: Senior Associate Vice President for Business and Finance | Effective: January 2008