Closing down: What to do if you have restricted funding

Restricted funds can only be used for a particular purpose. You can’t fundraise for a specific cause and decide to use the money in another way. Examples of restricted funds could include:

• beneficiary gifts
• emergency appeals
• legacies or grants given for a particular project.

Charities in receipt of restricted funds are subject to liabilities if they don’t follow the funding restrictions imposed.

Speak to your donors about the status of any current grants or contracts. If you need to use their funding during the closure period or are reliant on its contribution to your general funds, you may need to renegotiate their use.

You could discuss moving the funded activity to another like-minded charity to continue delivery. If the donor won’t allow the funding to be used differently than intended, you may need to return the funds.