Organisations may receive money for different purposes. Good stewardship distinguishes resources that can support general activities from those whose use is limited by donor conditions or other binding terms.
Unrestricted funds
These are resources generally available for the organisation's charitable or operational purposes, subject to its wider obligations and governance.
Restricted funds
Restricted funds are subject to a specific purpose or restriction. They should be recorded and reviewed separately so the organisation can demonstrate that use aligns with the restriction.
Designated funds
These are typically amounts set aside internally by the organisation's governing body from unrestricted resources. Their designation is usually not the same as an externally imposed restriction.
Practical checks
- Record the source and any restriction when funds are received.
- Classify transactions consistently and keep supporting evidence.
- Review transfers between funds rather than relying on the overall bank balance.
- Report both fund balances and activity for governance discussions.
Important: The exact treatment depends on applicable accounting standards, charity law and the terms of the funding. Seek qualified advice for a specific transaction or report.
Educational guidance only; verify your organisation's accounting, reporting, tax and legal requirements with a qualified adviser.