Finance Policy

Financial Responsibilities

Projects agree to…

  • comply with FCF’s Finance Policy and all financial laws of Thailand.

  • follow all FCF Finance Procedures. This helps FCF maintain efficiency and scalability, thereby keeping our costs low to the benefit of all Projects.

  • secure all funding required for Project activities and payroll. If you ever want help communicating with any of your donors or need fundraising coaching, please contact finance@fcfthailand.org.

  • be responsible for reporting to grantors, donors, and other stakeholders about Project activities and results.


FCF agrees to…

  • provide legal employment and payroll services to Project staff on a monthly basis or as needed for contract work.

  • withhold and submit social security payments, income taxes, and student loan payments when applicable.

  • submit annual workmen’s compensation payments.

  • fulfill funds requests, review expense reports, and keep our cloud fund accounting application, Aplos, up to date.

  • maintain separate designated funds to honor donor intent and help Projects manage their funding efficiently.

  • submit annual compliance and maintain relationships in good standing with Cord Ministries, GlobalGiving, and PayPal so Projects can continue using them as resources.

  • work with accounting and financial reporting auditors to fulfill legal financial compliance requirements on a monthly and annual basis.


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:

  • Medical & hospital fees associated with personal injury

  • Death or dismemberment

  • Travel, housing, transportation, utilities, or other personal expenses

  • Legal fees or arbitration

  • Medical, political, or any other emergency evacuation

  • Return of mortal remains


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

In the event that an incident occurs that causes, or has the potential to cause, their staff financial loss or expense, the parties will promptly consult together 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 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.

  • Cord Ministries International is FCF’s primary tax sheltered 501(c)(3) partner in the United States of America. While separate entities, we share a common vision and fiduciary responsibility to ensure that our activities are consistent with Cord’s tax exempt status. Using Cord’s service is not required for U.S. fundraising but highly recommended because their fees are a reasonable industry standard and our beliefs and values are aligned.

      • There is approximately a 2-6 week turnaround time on funds donated to Cord for FCF Projects.

      • In the first week of each month, Cord makes one transfer of all funds to FCF. Special one time transfers can be requested outside of the regular monthly schedule, but will incur a wire transfer fee.

      • FCF Finance can help Projects view or understand issues related to Cord donations.

      • Cord can set up custom Project pages and multiple giving designations on their website. If interested, contact finance@fcfthailand.org.


  • FCF has a GlobalGiving account that our staff are welcome to use for crowdfunding. GlobalGiving is trusted by top companies such as Google, Ford, United Airlines and many more who encourage their staff to give on this platform. We don’t recommend using this platform as your primary donor processor, but it’s a great tool for specific fundraising campaigns, especially when they have matching programs.

      • FCF has been awarded Top-Ranked, Vetted, and Effective status.

      • Donations using this method are tax deductible for U.S. citizens with processing times of 4-8 weeks between the donation and arrival of funds in Thailand. FCF has no control over when those funds are transferred.

      • In order to use this service, Projects agree to fulfill GlobalGiving’s reporting requirements. Reports are due every 4 months and FCF Finance will forward you reminders.

      • GlobalGiving’s user management system is very limited and Projects will be able to see all donor information for all Projects. Projects must agree to not edit other Project pages or collect information about donors to those Projects.

      • FCF reserves the right to edit any content on our GlobalGiving account if deemed necessary, and to use those public reports in updates we provide to FCF stakeholders and government entities.


  • FCF has a Thailand PayPal account for donations from anywhere in the world and in any currency. We recommend only making this donation option known to donors when they specifically request it because the exchange rate is bad and fees are high. Also, there is no tax deduction for using this method.


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 a realistic endeavor 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 hand written 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 with 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, these simple policies and procedures must be followed by all of us.


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 and gifts-in-kind are formally received by FCF from various sources and can only be formally received and receipted by the FCF Main Office, its branches, and Projects.

  • Regardless of the FCF receiving agent, every gift shall be processed by FCF Finance and assigned to the proper designated fund. Contact finance@fcfthailand.org for help with receipting.

  • FCF maintains a database of past donors and their source accounts. If the donor and designation is already known, FCF automatically assigns the donation to the proper designated fund.

  • No money or gifts-in-kind are to be held locally at branch offices or Projects. All incoming gifts are to be deposited into the FCF holding account where they will be designated to the relevant Project fund.


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 original receipt or signed written receipt.


Money flow within FCF

  • Transfers between the FCF holding account and Project operating accounts focus on supporting Project activities and staff.

  • Transactions between the FCF holding account and branch office operating accounts focus on supporting only the work of the branch office itself which is supporting the local Projects of its particular province. These operating accounts for both branches and Projects are personal accounts owned by FCF staff only, and pre-approved by FCF Finance. These accounts are to be used solely for Project purposes with no personal financial activity, per our auditor’s recommendation.

  • Balances may not be carried over multiple months per our monthly reconciliation process. A documented paper trail should clearly and separately show Project income and expenditures.


Example – Designated Project Donations Coming From Outside Thailand

Financial gifts received into the FCF holding or receiving accounts from outside Thailand will be distributed to the designated Project fund within our cloud fund accounting application automatically 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.


Purchase of personal assets are 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 need to 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 where 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 will 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:

  • The Project Director must submit 3 documents to the CFO: a detailed explanation for the current fund balance problem, a new budget for the next 12 months demonstrating how expenses will be reduced, and a detailed fundraising plan.

  • If the combined fund balance is negative, the allowed negative balance of an individual Project will not be more than the next month’s expenses on the new budget submitted to the CFO.

  • The combined total of allowed negative balances of all Projects needing help will not be more than 25% of FCF’s contingency fund unless the FCF Board of Directors gives the CFO special approval to temporarily exceed that limit.

  • Donations that we can “see coming” such as through Cord or GlobalGiving, but not yet in FCF’s holding account, will be factored into the current fund balance for purposes of calculating the combined current fund balance of the Project.

  • Until the fund balance is positive again and the Project is on a path to financial health, the CFO will be directly involved in monitoring all financial activities of the Project to ensure progress is being made.

  • If a Project is below the minimum balance for 3 consecutive months after submitting the 3 documents mentioned above to the CFO, the FCF Board of Directors will be asked to review the problem and may decide to permanently close the Project. However, financial health is the end goal, so extensions to the 3 month period will be made provided the Project is moving in a positive direction to resolve the problem.


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. In the event 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.


In the event 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 time, 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:

  • Example 1: A Project and FCF mutually agree that the Project will set up its own foundation to continue its current mission.

  • Example 2: A Project is not terminated by FCF, but wants to transfer to another existing foundation and do the same, or similar kind of work the funds donated were originally intended for.


Examples of when FCF will not transfer Project assets:

  • Example 1: A Project decides to start a business as its model to continue its current mission.

  • Example 2: A Project is permanently closed by an FCF Board of Directors decision.

  • Example 3: A Project is permanently closed for any reason and the Project Director wants to give the remaining assets to another entity outside of FCF.


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 which means the only information we receive is the ATM that was used. We strongly suggest avoiding using money drop machines for this reason. We have a database of partial account numbers that we’ve identified over the years, and between that and notifications from donors, we are able to 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 time 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 you can 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 goes on our list of current assets. The total value of FCF’s current assets are 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 need to 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 in the same way we treat 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 Project activities, both formal or informal, that involve the offering of 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.”


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

  • Prior to any program activities beginning, a program plan must be submitted to and approved by the acting Executive Director or CFO of FCF. The plan must demonstrate clearly how the new program supports the objectives of the foundation and mission of the Project. It must also include a financial plan that includes the likely suggested donation amounts to be requested and total annual donation revenue Projected.

  • The parameters of the program must also be approved by the Project’s advisory board and added to the official project description.

  • The new program must exist for the primary purpose of supporting the objectives of the foundation and mission of the Project. Helping to reduce the amount of fundraising needed is a secondary benefit. If the desire of a Project Director is primarily to reduce the amount of fundraising needed, a registered business separate from FCF that donates profits to the Project under FCF is a better alternative.

  • The program can not be publicly called a “business” to ensure the program is not, nor appears to be, a for-profit business. Effort should be made to be careful what language is used regarding the program. A bakery or beauty parlor, for example, would be better described as a “a job skills training center that teaches how to bake or cut hair.”

  • The program can not charge fixed fees for any goods and services, but can publicly display suggested donations provided it is clearly stated that the prices are “suggested” or “free will” donations.

  • All cash donations received must be submitted to the FCF holding account per our usual cash flow process, and will be designated to the program fund.

  • If it is determined by the FCF Board of Directors that the program has begun to go beyond its original purpose, the program may be required to change its structure, reduce its size, or permanently closed to prevent the appearance of a for-profit business being run under a non-profit foundation.

  • Contact finance@fcfthailand.org to discuss this topic further.