Capital Receipts for a Not-for-Profit Organization

A not-for-profit organization is a type of organization that operates for purposes other than profit-making. These organizations aim to serve the society or a specific cause. They rely on different sources of income to fund their activities, including capital receipts. Capital receipts refer to funds received by an organization from non-operating activities, such as donations, grants, or sales of assets. Among the options provided, the correct answer is option B - Donation for a building fund.

Explanation:

Subscription Fees:
Subscription fees are usually collected from members of an organization for their membership or access to certain services or benefits. While subscription fees contribute to the revenue of a not-for-profit organization, they are considered as revenue receipts rather than capital receipts. Revenue receipts are generated from the organization's regular activities.

Sale of Match Tickets:
If a not-for-profit organization is engaged in organizing and hosting events, such as sports matches, the sale of match tickets will generate revenue for the organization. Similar to subscription fees, the sale of match tickets is considered a revenue receipt rather than a capital receipt.

Income from Investments:
Not-for-profit organizations may invest their excess funds in various financial instruments, such as stocks, bonds, or mutual funds, to generate income. The income earned from these investments is considered as revenue receipts and not capital receipts.

Donation for a Building Fund:
A donation specifically made for a building fund is an example of a capital receipt for a not-for-profit organization. When individuals or entities contribute funds towards a building fund, it is usually intended for the construction, renovation, or maintenance of a physical structure owned by the organization. These funds are typically used for long-term purposes and are considered as capital receipts.

Conclusion:
In the context of a not-for-profit organization, a capital receipt refers to funds received from non-operating activities. Among the options provided, a donation for a building fund is a capital receipt as it is a non-operating source of funds intended for the construction, renovation, or maintenance of a physical structure. Subscription fees, sale of match tickets, and income from investments are revenue receipts generated from the regular activities of the organization.

Donations for a building fund are considered capital receipts as they are meant for a specific capital purpose, unlike operational income like subscription fees or income from investments.