In the context of not-for-profit governance and not-for-profit fundraising, acquittal refers to the fulfilment or discharge of obligations relating to funding arrangements.
This term is commonly used when an organisation has received a grant or funding from an external source, such as a government agency, a private foundation or charitable trust.
The acquittal process involves demonstrating that these funds have been used appropriately and according to the terms set out in the funding agreement.
This usually requires thorough financial reporting and documentation, including receipts, invoices, and financial statements. Successful acquittal of funds helps maintain the trust of the funding body and could impact the organisation’s eligibility for future funding.
Below is a short example to demonstrate how acquittal works.
Let’s imagine that a not-for-profit organisation dedicated to environmental conservation receives a grant from a government agency to fund a specific tree-planting project.
The funds are earmarked solely for this project, which includes activities such as purchasing saplings, hiring personnel for planting, and ongoing maintenance for a period of 5 years.
To acquit these funds, the organisation must carefully track all expenditures related to the project. This includes invoices for the saplings purchased, pay slips for the personnel hired, receipts for any equipment bought or rented for volunteers to use, and any other related costs.
At the end of the project, or at predetermined intervals as outlined in the funding agreement, the organisation provides a detailed financial report to the government agency. This report demonstrates exactly how the funds were used, supported by the collected documentation such as invoices and receipts. The organisation may also need to provide additional evidence of the project’s progress or success, such as photographs of the planted trees or data on the number of trees planted.
If the government agency is satisfied that the funds were used appropriately and in accordance with the funding agreement, the funds are considered acquitted. This successful acquittal maintains the trust of the government agency, demonstrates the organisation’s accountability, and increases its chances of receiving future grants.
What information should an acquittal report include?
An acquittal report will normally include four key types of information.
- Financial information,
- data and statistics,
- qualitative information,
- and project documentation.
The financial part of the report will provide confirmation that you not only spent the grant funding on the project, but prove what you actually spent it on (receipts).For acquittal of some grants you may be required to provide a Statutory Declaration as part of the financial reporting.
The Data part of the report should provide a snapshot of the impact and results of the project the grant was used for.
Data is useful, but only provides part of the picture. Adding in qualitative information and additional documentation such as surveys, cases studies, promotional materials from the project, participant quotes and/or pictures of the project adds depth and colour to the acquittal report.
The Funding Conundrum
What Boards and CEOs Need to Know About the Future of Philanthropy and Fundraising
Fundraising Fundamentals for Board Members
Board Fundraising Check-Up