Two Philanthropy Experts Explain – What Is Unrestricted Funding?
Genevieve Shaker, IUPUI and Pamala Wiepking, IUPUI
Unrestricted funds are grants or donations nonprofits get to spend any way they believe is appropriate to further their mission.
Unrestricted funding can also come with some limitations. Donors might, for example, designate the money for operating expenses like rent or to help strengthen the organization through support for leadership development.
However, only about 20% of U.S. funding for nonprofits has any degree of flexibility, the Center for Effective Philanthropy has estimated.
More often, nonprofits get money for a specific project in exchange for agreeing to several conditions and a specific timeframe. For example, someone might give a museum or a hospital US$20 million to spend building a new wing within three years.
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