Donors to community organisations or social enterprises can often specify how their donations should be used. For instance, they might want their funds allocated to a specific project, such as purchasing a new minibus.
Unrestricted funds are donations that the organisation can use for any purpose within its mission. These funds often cover operating costs or expenses that are difficult to fund through other means.
Only a funder can decide if a donation is restricted or unrestricted. This can be indicated in a letter or through a formal agreement. While an organisation might choose to “earmark” some of its own unrestricted funds for a particular project, these funds remain unrestricted because the decision was made by the organisation, not the donor.
