Categories in the performance report – What about grants?

Posted on 11 July 2016

Something you may have noticed about the minimum categories in the Performance Report is that there is no category for grants. Don’t panic! It’s deliberate.

The minimum income categories for Tier 3 and 4 reports are as follows:

So where are you supposed to record your grants? Well, it depends what the grants are for. If, for example, the grant was a general administrative grant which was granted for helping the charity to carry on their day to day operations, it would be recorded under “Donations, fundraising and other similar revenue/Receipts”. If, on the other hand, the grant was specifically to purchase food supplies to make lunches for school children and this was a service your charity provided, then it would go under “Revenue/Receipts from providing goods or services”. There may be some instances where you received a grant for both of these things, in which case you would need to split the grant between these two categories.

What is the rationale for this? Well, the main reason that these minimum categories have been set is in order to produce some comparability across the not for profit sector. To do this, it’s useful to know what the money was granted for, not just that a charity received grants. Then the reader is able to distinguish the extent to which the organisation was self-funding, or how much is paid for from external parties.

We have had several questions about the minimum categories with regards to both income and expenses, which are usually “Can I change the names of the categories?” or “Can I break the categories down?”. There is provision in both the Tier 3 and Tier 4 standards for you to be able to do both of these things, however, the standards say “provided that the separate categories are still maintained”. What this means is that you can’t mix donations with interest, or members fees with revenue from providing services, but you can rename or breakdown those categories into something more meaningful for your organisation.

What you cannot do is add a category called “Grants” and lump all of your grant receipts into that category. This is because this removes the transparency that is created by maintaining the minimum categories. We understand that some funders like to see their grants listed individually, or, readers of the Performance Report might like to know exactly how much the organisation received in grants. Therefore we suggest one of two options:

1. Include your grants in the minimum categories as listed above (being careful to split the grants based on what the money is intended for). Then add a note to the Performance Report next to the relevant category and split the grants out by funder there.
2. You could add a sub category of grants to the relevant minimum categories above. An example name might be “Grants received for general administration” which would be a sub-category of “Donations, fundraising and other similar revenue/receipts” or “Grants received for the provision of services” which would be a sub category of “Revenue/receipts from providing goods or services”.

It is important to note that adding or breaking down categories should only be done if it adds value for the readers. Listing every single income or expense item you have does not necessarily improve the reader’s understanding and therefore you should carefully consider whether you need to change the minimum categories.

If you are unsure of where to record particular transactions then please get in touch with us and we will be able to help you. You can call 0800 CHARITIES or e-mail us at info@charities.govt.nz.

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