Donation represents the act of giving, generally for charitable reasons, something to another person, organization or institution. The capital for its part represents that money and the goods that support or are the basis of a person, company or organization. In this way, by putting both concepts together, we find out what the capital donation is, which means giving funds or material goods that a company or individual can carry out, even under contract, depending on the legislation that regulates the country.
Capital grants are often made to finance the permanent structure of another company. Likewise, said donation can be made as an interest-free loan (which is no longer a donation), locating the donated amount in the company's liabilities line; as it can also be done in a non-refundable way, so that whoever receives the donation does not have to return anything, at all. For this to be fulfilled, an individualized donation grant agreement must be made.
For this, the organization that will receive the donation must be in good condition, that is, it must meet a series of requirements that make it the best option for a donation to be granted.
In the case of being a non-refundable donation, it is located in the loss account for the donor and it is located in the profit account, as income, for the organization that receives it. This in an accounting sense, so that it is understood how the record of that money or those goods is kept. The non-refundable donation itself represents the full meaning of the capital donation.
In some countries, taxation grants companies or individuals, taxpayers with the nation, to make donations, which will be deducted from the accumulation of money that they must pay the state in taxes.
This has allowed many organizations to benefit from the monetary and asset contributions that companies make, since companies direct the money they must pay to the state to non-profit organizations, such as foundations, homes, and nursing homes, to contribute with its operation and thus help the community in the same way.
