Copyright © 2002, United States Conference of Catholic Bishops, Inc. All rights reserved.
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I. Annual Appeals
More dioceses are turning to an annual appeal to all Catholics to raise funds for the programs and obligations of the dioceses. These campaigns can take a wide variety of forms. The wording of the campaign literature and solicitation appeals is a major determinant for the accounting procedures and practices that must be followed. Another major determinant is the beneficiary of the funds raised.
The simplest form of an annual appeal is one to help fund the operations of the diocese. Sometimes, however, the appeal takes on the form of a federated fund drive: raising funds for many organizations, such as Catholic Charities, an independent Catholic school, or, more commonly, for the participating parishes. If the participating organizations are guaranteed a specified portion of the proceeds, that portion has to be treated as an agency transaction. On the other hand, if the appeal allows the diocese the discretion in subsidizing these organizations, there is no restriction on the use of the funds.
Often campaigns are conducted to raise resources needed for a specified period such as the next fiscal year. If a time restriction is contemplated, the restriction must be noted in the literature of the campaign. If the pledge is donor-restricted for a specified purpose, the amount continues to be restricted until the purpose of the restriction is satisfied.
Most campaigns involve the use of pledges to be successful. These pledges are required to be recorded as assets of the organization. The fact that the pledges are not legally enforceable does not exempt them from being recorded. Pledges to be received over a period of years must be recorded at their net present value. If collectibility is doubtful, the use of an allowance for uncollected pledges should be used, just as it is for legally enforceable receivables.