Nonprofit Accounting Basics

Agency Transactions

Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.


What are agency transactions?

Agency transactions occur when one NFP (the agent) raises contributions for another NFP (the recipient). Contributions received through agency transactions are accounted for under FASB136 and are not recorded as revenue or support on the books of the agent. The primary factor in determining if a transaction should be considered an agency transaction is "variance power". If a donor stipulates the final recipient of the contribution then the agent does not have variance power and typically would not recognize the contribution as revenue.