General Information

What is a gift?

A gift (or contribution) is a transaction in which an entity makes an unconditional nonreciprocal transfer of assets (i.e. cash, stock, check) to the University without directly receiving equal value in exchange or expecting return of the asset(s).[i]

[i] Not for Profit Organizations, Section 5.03 – Distinguishing Contributions from Other Transactions

What is the difference between an unrestricted gift and a restricted gift?

An unrestricted gift is one where the donor allows the University, School or Unit determine how best to use the funds.  Unrestricted gifts have no donor restriction and are deposited to fund 111111.

A restricted gift is one where the donor stipulates when or how the gift may be used.  A restricted gift may be permanently restricted or temporarily restricted.

In the case of a permanently restricted fund, the gift itself is not spent but earnings on the gift may be spent for the purpose specified by the donor.  Such funds are generally referred to as endowment funds.  Generally, a gift of $100,000 is necessary to set up a permanently restricted fund.  See Endowment Funds for more information.

In the case of a temporarily restricted fund, the entire gift may be spent for the purpose specified by the donor.  Generally, the gift or total of gifts must be expected to reach at least $10,000 in order to set up a temporarily restricted fund. See Restricted Funds for more information.

If a restricted gift is less than $20,000, the donor should be contacted to discuss available options.   An exception may be made for a gift under $20,000 if that gift, when combined with other donor gifts with the same donor restriction, reaches $20,000.

Unrestricted, temporarily restricted, and permanently restricted are terms used to describe the net asset class of the fund.

 What are restricted funds?

The Statement of Financial Accounting Standards (FAS) No. 116 Accounting for Contributions Received and Contributions Made, paragraph 14 defines restricted funds as: “A restriction on an organization’s use of the assets contributed results either from a donor’s explicit stipulation or from circumstances surrounding the receipt of the contribution that make clear the donor’s implicit restriction on use. …Restricted support increases permanently restricted net assets or temporarily restricted net assets. Contributions without donor-imposed restrictions shall be reported as unrestricted support that increases unrestricted net assets.”

 Who decides what the restriction is on a fund?

The donor is the only one who may place a restriction on a restricted fund.   For this reason, unrestricted funds may not be moved into restricted funds.

 How does the University differentiate between unrestricted and restricted gifts?

The net asset class of the fund (unrestricted, temporarily restricted, or permanently restricted) is generally differentiated as follows:

  • Gift benefits University, School, or Unit as a whole
  • Broad expense category (i.e. financial aid, library support, athletics)
  • No specific use of gift


Temporarily Restricted
  • Gift is for a particular program, faculty position, purpose, or student category
  • Gift has a specific time restriction when it may be used


Permanently Restricted
  • Gift itself may not be spent, but the earnings on the gift may be spent for a temporarily restricted purpose


 Which funds should be spent first?

Temporarily restricted funds should always be spent before unrestricted funds.  This gives the University the flexibility to use unrestricted dollars where they are needed most.  It is also one of the best ways that the University may honor the donors who gave those dollars.

What is the difference between a gift and a grant?

Sometimes it is difficult to distinguish between a gift and a grant. If the resource provider is expecting a proprietary benefit of perceived equivalent value in return for the resources provided, the transaction is a grant. If the resource provider does not anticipate anything in return, or if the benefit provided by the institution is primarily a public benefit rather than a proprietary one, then the transaction is a gift.[ii]

[ii] AICPA Audit and Accounting Guide, Not-for-Profit Organizations (NFP Guide)

At Wake Forest University, gifts are processed by the Advancement Office and grants are processed by the Office of Research and Sponsored Programs.

How are gifts received?

All gifts must be processed through the University’s Advancement Office. The Advancement Office uses designation codes – not FOAPALs – to record gifts and will credit the gift to a particular designation code based upon the donor intent. Designation codes are mapped to FOAPALs through a link within the Advancement system. Please contact Kameron Gress for specific questions about links between designation codes and FOAPALs.

What is a FOAPAL?

The University uses Banner as its system of financial record. The general ledger in Banner is structured by what is referred to as a FOAPAL. A FOAPAL is made up of the six elements defined below:

F – Fund (required)

O – Organization (required)

A – Account (required)

P – Program (required)

A – Activity Code (optional)

L – Location Code (optional)

See Financial Reporting for more information on FOAPALs and the University reporting structure.

Where are gifts credited on the general ledger?

Once a gift is processed by the Advancement Office, it will feed to a FOAPAL on the University’s general ledger. Information about specific FOAPAL elements used in Advancement gift feeds is listed below:

F – Fund

Gifts of stock, cash, check, and credit cards are credited to a particular fund based on their restriction. Gifts of property and other non-cash gifts are credited to the unrestricted fund. Funds that most commonly receive gifts are:

Fund Gifts Received
111111 Gifts that are free from donor restriction.
RCxxxx Gifts that have a donor restriction but may be spent in their entirety.
EPxxxx Endowment fund gifts. The gifts themselves may not be spent, but the earnings on the gifts may be spent for the donor restriction. The earnings are spent from corresponding ERxxxx funds.
ETxxxx Gifts to fund trusts, gift annuities, and other split-interest agreements. The gifts in these funds are not available for University use until the trust or similar agreement terminates. At that point, the funds are distributed in accordance with the donor agreement and are directed to the appropriate restricted or unrestricted fund.

O – Organization

The organization or department that will benefit from a gift is driven by the donor. Situations where a gift may benefit more than one department or organization are handled on a case by case basis.

A – Account

Gifts from donors will generally credit one of the following accounts:

Account Use
41510 Fund 111111, RC, and ET funds
41508 Fund 111111 in the Financial Aid organization
41509 Fund 111111 in the ZSR library organization
41512 Non-cash gifts to all funds
41517 Endowment funds that will buy units in the Wake Forest University long-term pool
41521 Gift-in-kind to all funds

P – Program

The program code for a gift will follow the organization.

A – Activity

In some instances, an activity code may be used to track gifts. Such codes are handled on a case by case basis.

L – Location

Location codes are typically not used to track gifts.

When can a gift be used?

When a gift can be used is largely driven by the restriction placed on the gift by the donor. Depending on the restriction, the gift will fall into one of the following net asset classes:

Unrestricted gifts
Gifts that are free from any donor-imposed restrictions or stipulations and are available for immediate use.

Temporarily restricted gifts
Gifts subject to donor-imposed restrictions or stipulations. These gifts may only be used only when the restriction set by the donor has been satisfied. See Restricted Funds for more information.

Permanently restricted gifts
Gifts are subject to donor-imposed stipulations. They must maintained permanently by the University. Generally, the donors of these assets permit the University to use all or part of the income earned on related investments. See Endowment Funds for more information.