FUND MANAGEMENT BASICS
When people donate money or in-kind gifts, it is helpful for the Resources Coordinator to follow a few key record-keeping procedures to both ensure that the money is used in accordance with the donor’s intention and to avoid any appearance of impropriety.
When the searching family receives cash or cheques, the person receiving the donation should immediately forward the donation to the designated Resources Coordinators. The Resources Coordinators should:
Use a notebook or electronic program to track the donations.
Record the transactions regularly and keep a running total. The running total will ensure that you don’t overspend the funds.
Keep the receipts and the notebook together in a large envelope.
If larger donations are received (e.g. over $1,000), consider setting up a joint savings or chequing account to keep the money separate and secure. This kind of account can be set up wherever you do your banking.
Ask the bank to set up a joint account under your existing banking arrangements.
If you don’t anticipate using the money in the near future, set up a savings account. But set up a chequing account if you anticipate using the funds for current expenses.
To ensure transparency, request that there be two signatories for the account. Consider having a family member of the missing child as one signatory and someone other than the family as the second signatory. Anytime someone wants to withdraw money from the account, they will require both signatures.
Continue to use the notebook system outlined above to track the cash deposited and the cheques written. Write each cheque number on the invoice as well.
Make sure to have a clear understanding of where the money will be used right from the beginning and write it down. For example, “we will use this money toward billboards, searching family expenses (i.e. rent, clothing) and volunteer expenses (i.e. food, records checks).” Keep this list with the notebook described above.
The Community Response Plan Team cannot issue tax receipts unless the committee has a charity tax number and follows the reporting and other requirements set out by the Canada Revenue Agency for registered charities. A receipt may be given to someone who donates cash or writes a cheque, but make sure to clarify that this is not a tax receipt, but rather an acknowledgement of an amount paid. If the searching family would prefer that tax receipts be provided to donors, they can designate an appropriate charity to receive the donations. Searching families can meet with the designated charity and organize the specifics so that donors will receive tax receipts. Just keep in mind that in order for the charity to issue tax receipts, the money needs to go directly from the donor to the charity.
If it starts to look like the money donated will not be used in the near future, the searching family may decide to set up a trust fund for a specific purpose. Trust funds should be established in consultation with an investment advisor, financial institution, or a lawyer.