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Occasionally, one component Fund gives money to another component Fund. For example, the advisor of a Donor-advised Fund may wish to make the Fund’s annual grant to another Fund in the organization, instead of to an outside charity.
This transaction is compound – it is an interfund Grant for the giving Fund, and an interfund Gift for the receiving Fund. However, the overall assets and total Fund balance of the organization do not change, since there is no Gift of public support and no grant to an outside entity.
Some organizations prefer to distinguish such interfund transfers from Gift revenue (and grant expenses) in the General Ledger. Instead of the Gift Revenue account, they credit an Interfund Gifts account.
Refer to the Interfund Module for more information about Interfund Gifts.