For nonprofits

Restricted gifts and grants

A fund for each grant or restricted gift: what it holds, spending from it, releases from restriction, the grant report, and closing it.

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What a fund is

A fund holds money a donor or grantor gave for something in particular. Until it's spent for that, it's net assets with donor restrictions; everything else the organization has is net assets without donor restrictions, which can be spent on anything. Unrestricted money isn't a fund.

Purpose: to be spent only on what it was given for, such as the summer reading program.
Time: to be used from a day on, for anything. A gift for next year's budget is one.
Both: to be spent on its purpose, from a day on.

Funds sits beside Income, for a tax-exempt organization only. It shows what's Held in Funds, what's With Donor Restrictions, and what's been Released, then each fund with its grantor, grant, received, spent and balance.

Add a fund

On Funds, click Add Fund.
Name it, and pick Restricted by: Purpose, Time or Both.
Purpose: what the donor said it may be spent on. Available from, for a time restriction: nothing is charged to it before that day.
For a grant: the Grantor (one of your clients; the grant report is addressed to them), the Amount awarded, and the grant period, Grant period starts and Grant period ends. All are optional.
Notes are for you, and never on the grant report. Click Add Fund.

Money into a fund

A gift goes into a fund when you pick it under Given for, in Record Gift or when you mark a bank deposit as a donation (see Record a gift).
A grant paid in installments is one gift per payment, each given for the fund. The fund's page shows what's still to be received.
Only money goes into a fund. Goods or services given hold no money.

Spending from a fund

In Add Expense, pick the fund under Paid from fund. Its hint says what the fund holds.
A split expense (see Expenses) can take each part from a different fund, or leave a part unrestricted.
Payroll is charged to a fund on the payroll itself, not in Expenses (see Splitting salaries by time).
A fund restricted by time can't pay for anything dated before its day.

A fund never goes below zero

A fund can't spend more than it holds. When an expense costs more than the fund has on that day, Add Expense says so: Book Drive holds $500.00 to spend on Apr 18, 2026, less than $640.00.

Click Split the Cost to charge what the fund holds to it and the rest to unrestricted money. The expense becomes a split with both parts.
Or charge it all to unrestricted money, or record the gift that pays for it first.

Releases from restriction

Money is released from its restriction when the restriction is met. It moves from with donor restrictions to without them, and the books show the move as its own line.

Purpose, and Both: released as it's spent for its purpose, on the day it's spent.
Time: released on its day, all at once.
On the fund's page, Show releases lists each release in its Activity, beside what was spent.
The statement of activities shows Net assets released from restrictions in both columns: out of with donor restrictions, into without.

The fund's page

Received, Spent, Released and Balance.
Activity, newest first, with what the fund held after each line.
Spending by Category: what the fund has paid for.
Grant: the amount awarded, what's been spent and is left of it, what's still to be received, and how far through the grant period you are.

The grant report

Grantors ask how their money was spent. Each fund has a Grant Report: a private page and a PDF with what was received, what was spent by category, and what remains. It names no donors or vendors, and shows no notes.

Copy Link copies the private link to send to the grantor. View opens it.
New Link makes a new link and stops the old one opening. Send the new one to anyone who should still see it.

Close a fund

On the fund's page, click Close Fund, then Close Fund again to confirm.

A fund closes once its restricted money is gone: spent for its purpose, its day come, or given back to the grantor. To give money back, record it as an expense paid from the fund, then close it.
A closed fund takes no new gifts or charges, and what it received and paid for stays as it is. It's listed under Closed on Funds.
Reopen changes that, any time.
A fund with nothing in or out yet can be deleted from Edit. Once money has gone into or out of it, close it instead.

Something's not right?

"That would take … below zero." The fund holds less than the cost on that day. Use Split the Cost, or record the gift first.
"… can be spent from …, when its time restriction ends." The expense is dated before the fund's Available from day.
"… still holds … with donor restrictions." on closing. Spend it for its purpose, or record returning it to the grantor as an expense paid from the fund, first.
"… is closed. Reopen it …" A closed fund's gifts and charges can't change. Reopen it, make the change, and close it again.

Restricted money and releases are in the statements and the Form 990 worksheet: see The Form 990 worksheet. What each cost was for is in Programs and functional expenses.

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