6.2.2 Restricted or Designated Donations and Funds

Donations to individuals are never tax deductible to the donor; therefore, the location should inform donors that they will not receive an acknowledgment of a tax-deductible donation if the donor restricts or designates the donation to a named individual.

Common usage as well as a variety of specific accounting and tax rules and interpretations use the terms "restricted," "unrestricted," "designated," and "undesignated" with respect to donations and other gifts. The terms are not always defined in exactly the same way. For general purposes, donations for special archdiocesan collections such as Together in Mission and Peter's Pence and contributions for capital expenditures through direct donation or pledges are considered restricted or designated donations.

Restricted or designated donations cannot be used for operational costs unless the restriction or designation is intended for an operational cost, such as a donation specifically intended for staff development or for textbooks, for example.

The location should officially designate projects for which it will accept contributions. Donor contributions that are designated for projects that are not authorized by the location should be returned to the donor.

If a parish operates with more than one fund, such as a general fund, mission fund, building fund, etc., donation envelopes should be designed to show the separate contributions to each of these funds.

Donors may restrict a check donation by making an entry on the check's "memo" line. Locations must honor the restrictions or designations on the checks.

See Donor's Intent: Annual Report.

6.2.2.1 Pledges

Pledges are frequently used as a means to implement capital campaigns, annual giving goals, or other special projects or fund-raising efforts by locations. Depending on the nature of the pledge and how it will be used, a pledge payment may be considered operating income and subject to the archdiocesan assessment, or the pledge may be considered revenue not subject to assessment​.

A pledge is considered a binding promise by the donor to pay the amount pledged within a certain period of time. Locations should provide donors with a pledge card or other documentation for the donor to indicate the amount pledged and the payment schedule. Pledge cards and documents must be signed and dated by the donor and specify who is responsible for making the payment while the donor is alive (e.g., the individual or a trust). The documentation should also include provisions and assurances for payment in the event of the donor's death or other life events.

Pledge documents are maintained by the location; the amounts pledged and time schedules are compiled at the location and should be included as part of the location's budgeting and financial planning and reporting. Pledge payments and their purposes should be recorded as received for financial statement and reporting purposes. Pledges may or may not be designated or restricted to a particular purpose.

Locations shall regularly monitor pledges for fulfillment and shall follow up with donors on pledges that are not being met. If a pledge is not being met, locations should consult with the regional office or the Financial Services Help Desk (call 213-637-7500 or email fshelpdesk@la-archdiocese.org) for strategies on collections.

If a pledge or a fund-raising program involves a naming opportunity, special arrangements and approvals shall be coordinated through the Office of the Moderator of the Curia.