Federated campaigns work on behalf of groups of nonprofits to raise money on their behalf -- often through workplace giving or in other group settings. The campaigns incur expenses, of course, and the question is, where should those expenses be reported. It's complicated. Consider two cases. In the first, the federated campaign receives general donations and, at some point, makes independent decisions about which nonprofits should receive a portion of the campaign proceeds. In the second, the federated campaign receives donations that are earmarked ("designated" is often the term) for a specific organization. In the first case, a share of the overall cost of the campaign is properly reflected on the federated campaign's books. In the second case, a share of the overall cost is properly reflected on the recipient organization's books - as part of its fundraising expenses. The logic here is that federated campaigns that accept both designated and undesignated contributions are actually performing two quite different roles. On the one hand, they are acting as a community-serving charity whose mission is to raise and distribute money for worthwhile causes - causes it identifies using its own judgement and information. In that role, it is no different from any other NPO that raises money to support its mission. On the other hand, the federated campaign is also acting as an agent of other NPOs when it accepts and processes contributions that are designated for the others. In this case, the costs of raising the money should be seen as costs of supporting those other groups. Luckily, most federated campaigns do the bookkeeping before they pass the money along. They calculate an administrative fee and deduct it from the payments they make. The organization that receives the money should report the 'net' amount of money it receives from undesignated contributions and the 'gross' amount it receives from designated contributions -- and then add the amount of the fees that were deducted from the designated part to its total fundraising expenses. The American Institute of Certified Public Accountants (AICPA) publishes Technical Practice Aids (TPAs) to answer key questions about reporting financial information. TPA 6140.22 (issued in July 2007) deals with this complicated question.