Fundraising costs are divided into two main categories: Fundraising and “Other.” The purpose of this is to provide donors with as much information as possible about how fundraising is conducted and how these funds are used.

– Fundraising costs
Fundraising costs shall include all costs directly related to fundraising. In addition, the portion of overhead costs that can be attributed to fundraising activities shall be allocated here.

The most important thing to note is that both revenue and expenses must be recorded on a gross basis.

This also applies if the fundraising is conducted through a third party. Even though the funds are to be recorded in full, all costs associated with the fundraising—including any commission or fees paid to the third party—must be recorded as “fundraising costs.”

– Other costs related to the acquisition of funds
These are costs associated with the sale of goods and services or other ordinary business operations.

Examples include:

– Cost of goods and operating expenses for kiosk and café operations
– Expenses related to the rental of premises, lotteries, fulfillment of sponsorship agreements, etc.
– Costs related to the appraisal and sale of items received as inheritances and gifts
– Any tax expenses

Take me to “Expenses for the Organization’s Purpose”

Back to the chart of accounts
Glossary – Activity-Based Accounting