Restricted and Unrestricted Funds Management

Restricted funds are donations or grants that come with specific conditions on how they can be used. For example, a donor may specify that their contribution must be used for a particular project or purpose. In contrast, unrestricted funds can be used at the organization's discretion, allowing for more flexibility in covering general operating costs or addressing unforeseen expenses. Effective management of both types of funds is crucial for organizations, ensuring they meet donor expectations while also maintaining financial health and operational efficiency. This balance helps sustain their mission and long-term growth.