An unrestricted fund can be used in any manner that the Palace Board of Directors sees fit. This gives the Palace flexibility in allocating funds to specific programs where the funds are needed most.
Restricted Funds refer to a reserve of money that can only be used for specific projects or purposes. The funds can be restricted because the donor wants the money to go to a specific program or the donor wants the money to be utilized after a specific time or event, such as an anniversary. Restricted funds give donors assurance that their money is being used in the manner they desire. The donor makes the designation for the funds to be restricted through a letter accompanying the gift or through an explicit agreement with the Palace Theater.
Temporarily Restricted Funds
A temporarily restricted fund is usually time-bound and can be used for a specific purpose within a specified period. When the purpose for which it was intended is completed, or the time allowed has ended, the money becomes unrestricted.
Permanently Restricted Funds
A permanently restricted fund invests the gift and then uses the interest earned to fund specific purposes designated by the donor. The funds are deposited into an endowment fund that supports specific projects or the Palace in general. The Palace is only allowed to use the interest and investment returns to support specific activities of the organization.
Photo Credit: Felix Manuel Photography