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Section 03 · Stewardship & Analytics

The Christian Minister

Faithful stewardship is a math discipline. Allocate every dollar with intent, then track growth, restricted funds, and clergy taxes correctly.

Lesson 02 · Stewardship Math

Fund Accounting — Restricted vs Unrestricted Cash

Not all money in the bank is yours to spend. A donor who gives "for the building fund" has placed a legal restriction on that money — it can only be used for the building. Fund accounting tracks which dollars are restricted (must go to a specific purpose) and which are unrestricted (available for general operations). FASB ASC 958 is the US accounting standard that makes this mandatory for nonprofits.

Why It Matters

Your bank balance might say $80,000, but if $60,000 is restricted to missions and building projects, you really only have $20,000 to make payroll. Spending restricted funds on the wrong purpose is a breach of donor trust and, in some states, a crime.

The Formula

Spendable Cash = Total Cash − Σ Restricted Balances
Total Cash — Everything in checking + savings
Σ Restricted — Sum of every donor-restricted fund balance
Spendable Cash — What you can actually use for general operations

Worked Example

Bank balance: $95,000. Restricted balances: Building Fund $40,000, Missions Fund $15,000, Benevolence Fund $5,000.

  1. 1. Sum restricted: $40,000 + $15,000 + $5,000 = $60,000
  2. 2. Spendable = $95,000 − $60,000 = $35,000
  3. 3. Operating reality: only $35,000 is available for general expenses
Answer:$35,000 truly spendable (not $95,000)

Common Pitfalls

  • •Treating the bank statement as your operating balance — it lies to you.
  • •Borrowing from restricted funds 'just until next month' — illegal in most states.
  • •Accepting restricted gifts you can't actually fulfill (e.g. a $5,000 gift 'for a youth pastor' when you have none).

Restricted Cash & Fund Accounting Ledger

Available = Σ Unrestricted • Restricted funds may NOT be spent outside donor intent

Mixing restricted and general funds is a fiduciary breach. FASB ASC 958 requires separate tracking; the IRS audits intent.

Total cash
$83,500
Truly available
$48,000
Restricted (off-limits)
$35,500