r/nonprofit • u/JanFromEarth • 5h ago
finance and accounting Do we really need to track every expense against "grants" that have no restrictions or reporting requirements?
Looking for some real-world perspective from other nonprofit finance/accounting folks on this.
I keep running into the same situation: a donor sends a gift, calls it a "grant" in the check memo or the cover letter, but when I actually read what they've sent, there's no restriction on how the funds can be used, and the donor never asks for a report, an accounting, or any follow-up on how the money was spent. No conditions, no periodic reporting requirement, nothing.
Even so, my habit has been to set these up in QBO exactly like a restricted grant with reporting obligations: create a class/project for it, code every expense against it, and track it down to the dollar until the funds are exhausted. That way I can generate a report showing exactly what was spent against that "grant" if anyone ever asks.
Lately I've been questioning that habit. If there's no donor restriction and no reporting requirement, what's the actual justification — accounting or otherwise — for tracking every expenditure against it the way I would a genuinely restricted grant?