FIMS Fund Classes

FIMS Fund Classes

Since a typical Fund needs between 10 and 25 General Ledger accounts, and an organization may have hundreds of component Funds, manually entering all of the necessary account identification numbers (G/L Account Keys) into FIMS would be a formidable task. Locating and entering the correct debit and credit account for every routine transaction would also require a great deal of time and effort.

FIMS recognizes that even though there may be hundreds of component Funds at an organization, there are probably only a few financial categories for Funds, and every Fund in a category uses a similar set of General Ledger accounts.

These financial categories are called Fund Classes in FIMS. The Fund Class record also stores a table of the default debits and credits for your routine transactions. The set of General Ledger accounts that a Fund Class needs is called the Master Chart for that Class. It is important to distinguish the Master Chart, which is the template on which the G/L is based, from the Chart of Accounts, which is a listing of the actual General Ledger Accounts.

NOTE: An important part of the implementation process is a dialog between your organization and FIMS Support to determine the Fund Classes you will need.

Endowed Fund Class

The following characteristics are typical of endowed Funds:

• They maintain two or more Fund balances (the number will usually be consistent within the organization).
• They are invested in the same pool or pools.
• They require the same cash management procedures.
• They operate under a uniform Spending Policy.

A particular Fund within a class may have an extra account or two (for example, to hold the value of a unique asset or a few additional expense accounts for a Fund that has unusual non-Grant expenditures). These minor variations do not require a separate class.

If there are more significant variations among an organization’s endowed Funds, they may fall into two or more classes. This would be the case if, for example, some spent net income, and others spent a calculated amount annually. If one group of endowed Funds is wholly invested in Pool A, and another wholly in Pool B, they may need separate Classes.

Example: Master Chart Report for the Endowed Fund Class

1. This Master Chart report was filtered for Master Chart account records assigned to Fund Class 00 (Endowed Funds), but the Classes column shows that some of the natural account numbers will be also used by the other Fund Classes (for example, 40 (Operating), and 10 (Non-endowed).
2. Funds in the Endowed Class participate in a Pool. The Pool may be invested with multiple banks or money managers, but investment account balances are not usually tracked in a Fund level General Ledger.
3. The Endowed Funds maintain three Fund balances: Historic Gifts, Accumulated Earnings, and Available to Grant.
4. Available to Grant amounts are calculated annually. The Spending Policy Transfer accounts are used to move the amount from the Accumulated Earnings balance to the Available balance.
5. Gifts may be given to the Endowment (Historic Gift Balance), or to Available. Interfund Gifts are tracked separately.

Non-Endowed Class

Non-endowed Funds (variously called non-permanent, pass-through, flow through, or spend-down Funds) often require a similar set of G/L accounts, and therefore constitute a Fund Class.

• They usually maintain only one Fund balance (the available to spend balance). This greatly simplifies the chart.
• G/L accounts representing invested assets can be different for these relatively short-term Funds, or they can participate in the same investment pool(s) as the Endowed Funds.

Example: Master Chart Report for the Non-Endowed Fund Class

1. The Non-Endowed Funds need only one balance – Available.
2. All of the activity accounts (revenues, expenses, and transfers) roll up to the Available balance.

Operating Class

The Operating Class is unusual in that is normally has only one member – the administrative operating Fund.

Example: Master Chart Report for the Operating Fund Class

The Master Chart includes some of the same accounts that are used by Grant making Funds, but does not have a Grants Expense or a Grants Payable account. It also typically adds a few special asset accounts (for example, depreciation (contra-asset) accounts, an Accounts Payable liability account, or administrative expense accounts). The operating Fund is usually non-endowed, in which case, it has a single (available) Fund balance.

Other Fund Classes

There are often additional categories of Funds that need significantly different sets of General Ledger accounts, and therefore constitute distinctive Fund Classes. These Classes may include Special Projects (which have non-Grant or operational expense accounts instead of, or in addition to, Grants expense accounts) and deferred assets (for example, for Charitable Remainder Trusts). Differences in investments or Spending Policy among Funds can also necessitate other classes.