Other Income
services other income Other Income
The foundations sometimes receive non-gift income that is referred to as "Other Income". "Other Income" is not deductible by the payer for tax purposes because it represents payment for some service or product received. Some examples of foundation activities that produce other income receipts are:
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pre-football game events for alumni who pay to participate
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galas
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alumni picnics
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sales of merchandise, such as t-shirts, cookbooks, etc. (Note: in accordance with G.S. 105-164.13(34) sales of items by a nonprofit civic, charitable, educational, scientific or literary organization are exempt from tax when the net proceeds of the sales will be given or contributed to the State of North Carolina, or to one or more nonprofit charitable organizations, one of whose purpose is to serve as a conduit through which such net proceeds will flow to the State or to one or more of its agencies. We have determined that this statute exempts the University-related foundations, but does not exempt the Alumni Association.)
***Special Notes***
1. Other Income receipts of cash and checks should be forwarded directly to the FAI office for deposit. These should not be deposited through the University Cashiers Office. Credit card charges for Other Income should be forwarded to Gift Processing (unless the credit card transaction is processed directly by the foundation). If Other Income and a Gift are combined in a single payment, the receipts should be forwarded to Gift Processing. After processing the gift, they will forward the appropriate information to FAI. The deposit should be accompanied by ‘Other Income Transmittal’ form listing the information contained in the “FAI Transmittal for Other Income/Refund of Expenditures”
http://www.fis.ncsu.edu/foundations_accounting/services/documents/OI_form.xlsx
2. Other Income cash receipts and checks forwarded for deposit must include documentation that clearly supports the fact that the activity or event generating the income was sponsored by the Foundation. Examples of adequate documentation would include printed brochures, registration forms, web pages and event invitations that prominently indicate sponsorship by the Foundation on the front page. Deposits received with insufficient documentation that are payable to a Foundation will be deposited and credited temporarily to a foundation clearing account. An e-mail will be forwarded to the appropriate foundation office requesting necessary support. Upon receipt of such support, FAI will reclassify the credit from the clearing account to the correct account. Checks should be submitted for deposit within 24 hours of receipt, per University policy, referenced at: http://www.ncsu.edu/policies/finance/accts_receivables/REG07.30.2.php
3. All expenses incurred related to the activity that generates the Other Income must be paid from the same foundation project into which the Other Income receipts are deposited.
4. Participants in events or activities that will result in Other Income for a foundation should be instructed to make their checks payable directly to the foundation, not to the University.
5. Alumni picnics or socials, and any other activities funded through or sponsored by the foundation which produce Other Income receipts are not covered by the University’s liability insurance. Some foundations have their own liability insurance, but for those that do not, it is strongly recommended that the foundation obtain "event" insurance to cover potential liability issues or board approval of acceptance of liability if no insurance is obtained.
For answers to Frequently Asked Questions relating to Other Income - click here
Refunds of Expenditures
Refunds of expenditures are receipts from the original payee that are reimbursements of incurred cost and can be matched against an original expense charge (for example: office supplies returned to a vendor in exchange for a refund). If an individual or entity is helping to “cover” costs by paying for a portion of them, those monies should be treated as Other Income, not a refund of expenditure.
Monies forwarded to FAI which are classified as refunds of expenditures should include adequate documentation supporting the expense payment by the foundation and could include a PeopleSoft Financials screen print with copies of invoices and small purchases or purchase order screen prints supporting payment by the project being reimbursed.