What is the difference between restricted and unrestricted donations?

A: Just as the name implies, a restricted donation is given by the donor with stipulations attached. In other words, it is given to be used for a specific purpose only…it may be in support of a program, a scholarship, an event or a charitable campaign. Once specified, the gift cannot be used for any other purpose without the consent of the donor. An unrestricted gift can be used wherever the need is the greatest. It is a gift given with “no strings attached”. Unrestricted donations may not be the most glamorous gifts, but they are of critical importance to every nonprofit organization. Unrestricted money is flexible. It allows an organization to run smoothly, enables innovation and provides fuel for growth. It unlocks potential and makes it possible for organizations to weather crises without losing momentum.