Finance Policy

Financial Responsibilities

Projects agree to…


FCF agrees to…


Limit of FCF’s Liability

FCF is not liable for any financial loss or expense incurred by Projects and their staff, including but not limited to:


Project Directors will ensure that all Project staff are aware of FCF's limit of liability.

If an incident occurs that causes, or has the potential to cause, their staff financial loss or expense, the parties will promptly consult in good faith to agree on a plan of action to mitigate the adverse impact of that event.


Legal Financial Status

FCF is a registered social foundation in Thailand, meaning that it has a license to participate in socially relevant activities stated in our charter objectives, petition for visas and work permits, receive international tax-sheltered funds, and receive local donations. Our type of social foundation is not considered tax-deductible for Thai citizens.


Fundraising Sources

Projects can secure funding from anywhere in the world and transfer that money to our holding account in Thailand via any legal method. Common methods of giving to FCF can be found on our giving page. FCF will help Projects honor donor intent by placing money in the appropriate designated fund determined by the Project.




Local Government Compliance vs International Compliance

While international tax and accounting compliance is of great value to FCF, we realize we cannot meet the needs of all governments with one system. In light of that understanding, FCF’s financial system was designed to prioritize local government compliance. It is the responsibility of Projects to do their due diligence to “translate” FCF financial systems into vocabulary and form that is in full compliance with partner requirements from other government systems. 


For example, opening and managing numerous foundation bank accounts is not realistic using current Thai banking systems. We once had a grantor from a foreign country insist that we open a bank account specifically for receiving their funds which we were told was a requirement of the source country. We politely declined because while the money was physically in the same holding account with other FCF money, it was kept separate within our cloud fund accounting software. The grantor agreed to this arrangement, and the Project hired its own 3rd party auditor to provide a report on that specific designated fund.


Bookkeeping

FCF’s bookkeeping is done by full-time Thai administrative staff with relevant degrees and experience, using a combination of handwritten records and a digital double-entry accounting system called Aplos. In addition, a 3rd party accounting auditor reviews and reconciles our expense reports and bank statements each month.


Expense Reports

FCF receives receipts for all transactions and an itemized expense report but does not enter all of those individual transactions into Aplos. For example, “food” will be represented on your statement as one expense during a calendar month rather than a detailed list of all food purchases. Projects should additionally maintain copies of all expense reports they turn into FCF Finance for their own records.


Financial Statements

Project designated fund activity and current fund balances can be viewed by logging into your Aplos account. If you need help using Aplos or preparing financial statements for donors, please arrange a meeting with finance@fcfthailand.org.


Audits

Every month, FCF submits all receipts to a 3rd party bookkeeper for review. Every year, FCF financial records are audited by a separate 3rd party accounting firm to ensure their accuracy. This audit report is included in the FCF Annual Report that goes to the Ministry of Interior. The financial statements the auditor prepares follow both Thailand Financial Reporting Standards (TFRS) and International Financial Reporting Standards (IFRS). To request a copy of this report, contact finance@fcfthailand.org. The report is available in Thai or English, usually sometime in May. 


If a donor or grantor requests a formal 3rd party audit of your specific Project or a specific designated fund, FCF Finance must be included in the process to ensure that we are providing legal financial information about the foundation. Our goal is to help your Project maintain your funding, protect your interests, and provide accurate information in a timely manner. 


FCF Financial Transaction Flow Plan

Within the FCF family of people and Projects, there are guidelines imposed upon us by sending organizations, sending countries, and Thailand. Financial reporting guidelines and tax laws require formalizations that show clear financial procedures. For any Project or person to avail themselves of tax-privileged donations, we must follow these simple policies and procedures.


Overview

FCF has one main holding account that all foundation money passes through. We have several other business banking accounts that are only for receiving donations, but the balances are regularly transferred to our holding account. Both FCF branch offices and Projects prepare annual expense and income Projections which are consolidated into the annual expense & income budgeting tool in Aplos for the upcoming year.


Money coming into FCF


Money leaving FCF

Money leaves FCF for only pre-authorized purposes. Authorization is granted by FCF Finance, its branches, and Projects. Every expenditure must be documented and confirmed by an original receipt or signed written receipt.


Money flow within FCF


Example – Designated Project Donations Coming From Outside Thailand

Financial gifts received into the FCF holding or receiving accounts from outside Thailand will be distributed automatically to the designated Project fund within our cloud fund accounting application if the designation is already known or upon notification of designation by either the receiving Project or sender. 


Example – Local Donations Received by a Project

All financial gifts received by an FCF Project shall be transferred to the FCF holding account.


Purchase of Assets

FCF is experienced with and happy to assist Projects with large or complex purchases such as land or vehicles. Payment for the purchased item or service may be processed directly from FCF’s holding account for these special non-recurring expenses. If you need assistance, please contact communityrelations@fcfthailand.org. 


The purchase of personal assets is outside the scope of FCF’s responsibility, but we are happy to provide information on the process of making these purchases. If an FCF employee helps any FCF staff with the process of obtaining a personal asset, said employee is acting as an independent contractor outside of normal working hours, and FCF is not liable for any financial loss, expense incurred, or tax liabilities.


Minimum Fund Balances & Contingency Funds

Projects must maintain a minimum combined balance of all unrestricted designated funds of 3 months' wages and benefits of currently employed staff under the Project. Unrestricted funds are those that FCF is not contractually or ethically obligated to use for a specific purpose. For example, if staff salaries and benefits of the Project are 100,000b each month, the minimum combined balance needs to be greater than 300,000b at all times, preferably in a separate contingency fund. 


If one of our Project Directors ever suddenly died or abandoned the Project, it might immediately cut off the monthly donation revenue to the Project and thus force the Project to close. In most cases of employee termination without cause, as the legal employer, FCF would be required to pay 3 months' wages to each employee under the Project, and we would want to help our staff as they transition through this unexpected event. The amount of severance depends on tenure. If the total Project designated funds are not sufficient to pay severance at any given time, this is a risk to FCF and its other Projects. Keeping this minimum balance will protect all Projects in the foundation and help provide a barrier between your Project and unknown financial emergencies. We encourage all of our Project Directors to set a goal of saving 6 months' expenses in a separate contingency fund.


Our desire is for all FCF Projects to be financially healthy. However, we recognize that sometimes unforeseen circumstances happen, which could lead to an unusually low fund balance. If a Project goes under the minimum balance required, the CFO will take the following steps:


Project Closing or Transferring

FCF reserves the right to retain all funds donated to the Project’s designated fund. Any items purchased with FCF funds are the property of FCF. If a Project is closed, these items must be returned to FCF unless approved for transfer to another foundation. FCF reserves the right to make the final decision as to what, if any, transfers occur, but typically this is something that can be done and FCF desires to do. Transfers can only be made from FCF to another Thai foundation.


If FCF has agreed to help a Project transfer to another foundation or set up its own foundation, all assets purchased with FCF funds, and designated Project funds, will be transferred to the new foundation. The nature of the work under the new foundation must be similar to that for which the funds were originally donated to FCF. All cash and asset transfers must be initiated within 3 months of officially leaving FCF, after which any remaining cash and assets will remain with FCF. We recognize that asset transfers such as property may take substantially longer than 3 months, but the transfer process should begin within that time frame.


Examples of when FCF will transfer funds to another foundation:


Examples of when FCF will not transfer Project assets:


Undesignated (Mystery) Donations

Occasionally FCF receives money that doesn’t have a designation. Thai banks do not like to share information with each other, so we never see anything a donor includes on the memo line of their banking app. The donor will assume that FCF can see their note, but it is never received by FCF. We always see a partial account number and know the source bank. We won’t know the intended designation unless someone informs FCF or we already have the partial account number in our database. Sometimes donors use money-drop ATMs, meaning the only information we receive is the ATM used. We strongly suggest avoiding using money drop machines for this reason. We have a database of partial account numbers we’ve identified over the years, and between that and notifications from donors, we can identify the purpose of nearly all of our donations. FCF Finance will always go above and beyond to attempt to honor donor intent, and we ask that our Project Directors remind donors to notify them when they donate.


Any undesignated money we receive is placed in a temporary undesignated fund until it’s claimed for up to 3 months, after which it will be transferred into FCF’s general fund. This does not increase the FCF admin budget for that year, but it does help reduce the burden of cost share, so all Projects benefit from undesignated donations. If you think you are missing a donation, please contact finance@fcfthailand.org with as much information as possible about the transfer.


Asset Management

In order to protect our volunteers and staff, FCF needs to be able to confirm the existence of assets purchased through FCF. The following plan only applies to items expensed through FCF. If you purchase anything using personal money, those are considered personal assets, and FCF is not liable for any financial loss, expense incurred, or tax liabilities as a result of those purchases.


Any items you purchase through FCF with a value over 1,000b that can be used for more than a year go on our list of current assets. The total value of FCF’s current assets is added to our balance sheet by our 3rd party auditor which is submitted to the government each year. If an asset is sold, the proceeds must be returned to the Project fund via FCF’s holding account. If an asset is given away, we need to document it as a gift and remove it from our list of assets. Legally, all assets purchased with FCF funds are the property of FCF. However, if a Project ever transfers or closes, we will treat physical assets like any remaining fund balances. In most cases, assets can be transferred to the new organization. Assets are depreciated using Thailand’s standard accounting method.


Direct Payment From Foreign Sources

All transactions to pay for goods and services in Thailand must be used with funds that have passed through FCF’s holding account and follow FCF financial procedures. Exceptions to this rule can be made on a case-by-case basis by contacting finance@fcfthailand.org. The purpose of this is to protect the foundation and other Projects from the risk of a Project using a foreign entity to pay for anything outside our legal charter objectives or anything illegal.


Goods & Services

For the context of this specific section, a “program” refers to any formal or informal Project activities that involve offering goods or services to the community in exchange for suggested donations. According to Section 110, Chapter 3, of the Civil and Commercial Code of Thailand, 


“A foundation consists of assets allocated for the purpose of public charity, religion, art, science, literacy, education, or other purposes for public benefit and not for profit sharing… [and] must carry out the objectives of the foundation.”


To implement a new goods & services program under an FCF Project, Directors must adhere to the following:


Loans

FCF and its projects do not provide loans of any kind to employed staff, volunteers, or any other individuals or entities under any circumstances. We encourage anyone seeking financial assistance to explore alternative resources available within their communities.