Individuals or companies may donate money to be used for a specific purpose only. This can happen with projects like a land acquisition, capital construction project, etc. But before choosing to ask for restricted donations or grants, it is necessary to consider the limitations.
It is understandable that donors and foundations like to fund specific projects with measurable, concrete outcomes. Putting a tangible project at the center of a grant application can make the ask more compelling. However, donor restrictions, and the state laws and accounting standards that protect them, translate to more time and energy devoted to paperwork and financial tracking that is separate from what you are already tracking for your general fund. Also, unforeseen circumstances may prevent the intended project from happening, which means the money would need to be returned to the donor. Unless your group has the capacity, this type of administrative burden might take away from the precious resources individuals in your group need to help fulfill the group’s mission.
So, how do you make your request compelling without unwittingly asking for a restricted donation? Highlight your group’s mission and flesh it out with the projects you are doing or dreaming about, then specifically ask for funding for your general fund, which will enable you to make your projects a reality.
If you’d like to learn more about restricted donations and what to do if a donor gives an unsolicited restricted donation, read this helpful article at the Foundation Group website.