Spreadsheets for Endowment Accounting Don’t Add Up

COP Advertorial2019 THUMB Endowment AdobeStock 104920282Whether a donor advised fund, a CPA firm providing accounting services to endowments, or an organization with an endowment, if you rely heavily on spreadsheets, you may want to explore an endowment accounting solution.


Here are five ‘red flag’ reasons why relying on spreadsheets doesn’t add up to best practices for endowment management.

1. Not Transparent
Having your endowment records in a spreadsheet makes it impossible to fully share transaction history with donors and co-workers. A spreadsheet makes it impossible to drill down from a report or dashboard to the underlying records.

2. Not Unit or UPMIFA Friendly.
Formulas and calculations do not lend themselves to automated functions and programmed rules. Unitizing fund transactions and historical averaging can be error prone and time consuming if not handled by software designed for this task.

3. Data Security
Internal control may dictate that certain staff members should not see all endowment data. That’s hard to do with a spreadsheet. Additionally, a spreadsheet does not allow segregation of duties and proper audit trail.

4. Limits Growth
As an organization grows, the amount of effort required to maintain spreadsheets will grow exponentially. This increased use of time and resources will limit the ability of an endowment to grow.

5. Vulnerable to Fraud & Errors
Fraudulent manipulations in company spreadsheets result in damaging losses. It’s hard to enforce internal controls to catch these occurrences. While fraud will always be a threat to spreadsheet systems, they are also susceptible to trivial human errors. Missed negative signs and misaligned rows may sound harmless, but when they damage donor confidence or cause a considerable loss of opportunity, it can be catastrophic.

Having the right tool that eliminates spreadsheets, increases capacity to manage more endowments and speaks the same language of your organization means the difference between success and failure.

Related Materials

Read the Executive Paper: Endowment Management Tipping Point–When & Why to Move Beyond Spreadsheets

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