Final answer:
A conditional promise to give is a pledge to donate to a nonprofit based on the fulfillment of specific conditions. It is recorded as revenue in the organization's financial statements only when those conditions are substantially met. Typically it's not recorded immediately upon receiving the pledge due to its contingent nature.
Step-by-step explanation:
A conditional promise to give is a pledge made by a donor to a nonprofit organization, where the fulfillment of the promise is contingent upon certain conditions being met. These conditions need to be specific and measurable. It is not recorded as revenue on the organization's financial statements immediately. Instead, the promise is recognized when it becomes unconditional, meaning when all the stipulated conditions have been satisfied.
In terms of accounting, a conditional promise to give is generally recognized under the accrual basis when the conditions are substantially met, and then it can be counted as revenue. This usually occurs when the nonprofit has little discretion to avoid the conditions, or the likelihood of the conditions being met is high enough that it's responsible to anticipate the donation.
For example, if a donor promises to match other donations up to a certain amount after a fundraising goal is achieved, then the pledge is conditional and not recorded until that goal is met. Only when contributions from other donors reach the stipulated figure does the matching promise become unconditional, and the organization records the revenue.