Direct Donation

The amount a customer pays is split into two parts that are clearly shown on sales documents:

• an amount that recovers the cost of materials used and expenses incurred in making the frame, but without any recognition of the labour involved;
• a donation from the customer to a named charity.

The charitable donation is accounted for separately from all other income and, therefore, can be identified and quantified at any time in the accounts.

Click here to see an example invoice with a Direct Contribution

Indirect Donation

The amount a customer pays is shown on sales documents as a single price.

As above, the single price recovers the cost of materials used and expenses incurred in making the frame but additionally includes a donation to a designated charity that is not shown on the sales document.

At the end of an accounting period all Indirect Donations collected during that period will be paid out to the various designated charities.

Click here to see an example Invoice with an Indirect Contribution. The invoice value has been rounded up with a charitable contribution to a designated charity.

Surplus Operating Profit

The amount a customer pays will also be shown on sales documents as a single price.

This approach differs from the Indirect Donation in that the sale will not be associated with any specific charity within the accounts. It will, however, include an amount equivalent to a "donation" in lieu of the labour element of the job.

The "donation" element is accounted for as a percentage oncost to the material costs and is intended to contribute to an operating surplus at the end of an accounting period.

All or part of the operating surplus will then be distributed to charitable cause(s). That part that is held back will be used to fund material purchases for the following period.

Click here to see an example Sales Receipt of this type