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GAAP For Non-Profits › Specific Financial Statement Items


The treatment of investment income from endowments is discussed under Investment Income.

An endowment contribution is a contribution with a restriction that the principal amount of the contribution is never to be spent. The organization receives a benefit by way of income generated from the endowment. To be considered an endowment contribution, the restriction cannot be simply internally imposed, eg. by way of a policy of the organization. It should be the written wish of the donor.

A restriction requiring a contribution to be held for a long period, for example more than ten years, is not an endowment.

Where there is an endowment fund, an endowment contribution would be recognized as revenue of the current period in the endowment fund. (4410.60) (When the organization follows the restricted fund method, it must have a restricted endowment fund.)

Where there is no endowment fund, the contribution of an endowment would be accounted for in the period as a direct increase in endowments and not pass through the statement of operations. The contribution would be shown in the statement of changes in net assets. (4400.29)


An organization must disclose its policy for endowment contributions. (4410.21)
As with all contributions, the organization must disclose contributions by major source. (4410.22)