What is an Unrestricted Donation?
Nonprofit organizations typically depend on a variety of funding to keep them alive and well. They need funds to pay their bills, pay their staffs and pay for the costs of running their programs. How a nonprofit allocates funds depends greatly on the types of donations they receive, as these types of funding vary greatly in how they can — or cannot — be used.
Understanding the Types of Financial Donations
Each nonprofit determines the types of financial support they can receive from donors. When it comes to financial donations, here are a few of the main categories:
- Permanently Restricted Funds: Often called endowments, these funds are subject to lasting donor stipulations, which mandate that the funds be held in perpetuity. The donor can limit earnings to use for a specific purpose or allow them to support operations.
- Temporarily Restricted Funds: These gifts are subject to donor-imposed stipulations that can be removed with the passing of time or when spent for the purpose intended by the donor.
- Unrestricted Funds: These funds are free of donor stipulations. Board-designated funds are included in this category. More often than not, the board will pre-determine how to use these funds for a certain purpose, or it can recategorize the funds at a future date.
Charitable organizations need cash to carry out their daily operations and unanticipated costs. Thus, having an adequate and steady stream of funds without strings attached — unrestricted funds — is the best way to keep a charity’s operations and programs strong and sustainable.
Unlike temporarily or permanently restricted funds, unrestricted funds can be used to cover the cost of operating expenses, such as rent, utilities, salaries and other day-to-day expenses. The grants and individual donations a nonprofit receives for general operating support allow management to refocus its efforts from raising funds to improving programs and responding to emerging community needs.
Recent funding studies have shown that nonprofits recognize unrestricted gifts as very special dollars. Nonprofit organizations commonly use these dollars to invest in their infrastructure, to bring back a financial management position that was lost or the development person they needed – all in an effort to propel the mission forward without delays.
Unrestricted funds allow a nonprofit organization to work smoothly, enables innovation and provides fuel for growth. It unlocks potential and allows people to get down to business and do what they’re best at. It makes it possible for great organizations to weather crises without losing momentum.
Central Oklahoma Habitat for Humanity welcomes all types of donations to fund our mission, and we receive a variety of donations, from home goods for our ReStores to financial gifts to fund our mission, we welcome all types of donations to fund our mission. Each gift you make helps a family achieve the stability that comes with safe, decent and affordable housing.
All Central Oklahoma Habitat donations are tax-deductible, as allowed by law, and will be acknowledged with a letter you may use for tax purposes. We take our responsibility to contributors and partner families seriously, and all donations go directly toward the building of homes and support of our Critical Home Repair program, unless otherwise specified.
Simply complete our online donation form to send your gift.
You can choose one or more of these components to sponsor for a Central Oklahoma Habitat home, or enter a specific amount in the total contribution field below. If you prefer to send a check, please print and complete our donation form. Together we can ensure more families have the opportunity for a better home and by extension, a better life.
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