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A building fund is a designated, often donor-restricted, pool of money set aside for acquiring, constructing, or renovating facilities.
Churches and nonprofits create a building fund to track gifts and spending for facility projects such as new construction, major renovations, paying down debt on a property, or capital improvements. Gifts donors give to a building fund are typically restricted to that purpose, so they should be used for the building and reported separately from general operating tithes and gifts.
In a fund accounting system, the building fund is set up as its own fund, so leaders can see the cash available for the project, expenses to date, and the remaining need. Building funds often go hand in hand with a capital campaign and a capital budget.
A dedicated building fund keeps capital gifts from being absorbed into day-to-day operations and gives your board and donors a clear view of project progress.
In Aplos, you set up your building fund as its own fund, so every gift and expense for the project is tracked and reported separately from your other funds.
Because every transaction in Aplos is assigned to a fund, you can always see how much has been given, what has been spent, and what remains. Fund-based reports make it easy to share transparent updates with your board and congregation, and you can track restricted and unrestricted money without mixing the two.
Gifts donors designate for a building are donor-restricted. A board may also set aside unrestricted resources for a building project (board-designated), which is an internal designation rather than a donor restriction under GAAP.
The building fund is the accounting bucket. A capital campaign is the fundraising effort that often fills it.
Not if donors restricted the gift for building purposes. Using restricted gifts for unrelated expenses can go against donor intent and undermine trust.
Create a fund for the building purpose, then code related gifts and expenses to that fund.
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