NPO LECTURE 03 2/6: Fund Raising Events

HM RANA UMAR FAROOQ  The best teacher of CMA USA

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00:00The last problem is fund raising events.

00:13In fund raising events, how do we account for things in terms of income and expenditure?

00:20For example, you get an event done by yourself.

00:23For example, you get a phone call or an event where people donate to you.

00:32But for that event, you have to spend some money.

00:37So, you have to deal with people directly.

00:41Now, we have to see if the NPO is a direct principle or not.

00:48What does principle mean?

00:50Is the NPO organising itself or not?

00:56If all the hard work is done by the NPO, then what do you call a telephone?

01:08You collect money on the telephone.

01:10So, there will be all the arrangements for that.

01:12So, you will have revenue and expenses.

01:18So, you will have revenue in terms of income and expenses in terms of expenditure.

01:27On what basis?

01:29On a gross basis.

01:32There is a small number in the paper.

01:36We have organised a fund raising event.

01:39It can be done on a gross basis or a net basis.

01:43If it is a principle, then we are writing the rest of the income separately.

01:48Contribution separately.

01:50Membership separately.

01:52There was a fund raising event as well.

01:54If it is a principle, then we will not write it on a net basis.

01:58We will write it on a gross basis.

02:01But if you say to the NPO that we are organising an event as a student.

02:06And we are organising a musical concert or some other event.

02:09Or we are organising a Quran khani.

02:11Or we are organising some other event where we will give tickets to people.

02:14And people will come and participate.

02:17And they will give you whatever income they get.

02:20Now, your name is being taken for them.

02:23But you are not directly involved in any arrangement or organisation.

02:27So, you are not directly involved in the principle.

02:30Here, the principle was yes.

02:32And what is the principle here? No.

02:33If it is here, then whatever tickets you sell from there.

02:38Revenue.

02:40And whatever expenses will be there.

02:42Adjust them and record them on a net basis.

02:49That's it.

02:51What did you learn from this point?

02:53One thing is confirmed.

02:55If there is a fund raising event.

02:57So, if you get any income from it, then you will write both income and expense.

03:01But if you are the principal yourself.

03:05Then you have to tell the stakeholders of NPO.

03:09That from this fund raising event.

03:11How much money our donors have given.

03:14We will not do the net.

03:16We will tell that in this telethon.

03:18Our revenue was 5 crores.

03:21Below, we will take expense from operating expense.

03:24That how much will be spent on telethon.

03:26We will not do the net there.

03:27So that we get complete information.

03:29What the donors have given.

03:31And where he himself will not be the principal.

03:33Where he himself will not be the principal.

03:35Then after that event is concluded.

03:38If any income or expense is left.

03:40Then we will write it as what we got from there.

03:43We will not write income or expense.

03:45So, if you are the principal.

03:47Then we will write on a gross basis.

03:49And if you are not the principal.

03:51Then we will write on a net basis.

03:53Just revise it and see.

03:57Thank you.

04:27Yes, tell me.

04:48Now, the last point we studied from this.

04:51One is investment income.

04:53Which one we studied before investment income?

04:55Government funding.

04:57Now, the same thing will come there too.

04:59If you have done any work as a principal.

05:03Then you will report the revenues and expenses on a gross basis.

05:09Separately.

05:11And if you have not done the work as a principal.

05:13Okay.

05:15So, if you have saved on that.

05:17For example, the federal government has said that so many vaccines have to be made.

05:19And these people have to be given.

05:21So, who is doing all the work?

05:23Who is the main principal?

05:25Federal government.

05:27And the government that gave you the fund.

05:29We will write on a net income basis.

05:31But if you are doing all the work yourself.

05:35The government has given the funding.

05:37But you have the decision discretion.

05:39Then the revenues will be reported separately.

05:41And expenses will be reported separately on a gross basis.

05:45Are you understanding?

05:48Yes.

05:53What was it?

05:55Anyone else?

05:57Yes.

05:59So, what is the importance of these details?

06:01How can you make a difference on paper?

06:03Both in the objective and in the paper.

06:05Does anyone have any objection?

06:07Any objection?

06:09See if you can read this.

06:11Okay, Mr. Book.

06:13Read one or two examples.

06:15This is the example of ICAP.

06:17Example number 13 and 14.

06:19Read the example number 13 and 14.

06:22It's 13 or 14 in ICAP.

06:24Read in my own book.

06:26In the same book, number 13.

06:28Number 14 is in the book of Lahore.

06:32And our book now writes ...

06:36Since there is a surplus product.

06:41See there is a surplus.

06:43We have on page number 539, example number 8 and 9, we are talking about event, right?

07:10Fundraising event, right?

07:11So, you can go to our website and see example number 8 and 9.

07:15In our book, there is example number 8 and 9 and in iCAP's book, there is example number 13 and 14.

07:23See if it is clear or not.

07:30Hurry up, Shahbaz.

07:41Okay.

08:11Okay.

08:41Okay.

09:11What is written here?

09:12If you are the principal, then?

09:14If you are not the principal, then?

09:17If you read one or two examples of government funding, then you will understand.

09:22So that you know that you have to write these things on a gross basis and not on a net basis.

09:27Okay, friends?

09:28Anyone has any objection?

09:29Okay.

09:30Close it, Shahbaz.

09:36What will be our next problem?

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