Designated fund
Unrestricted money the trustees have earmarked — and can release again.
A designated fund is part of a charity’s or club’s unrestricted money that its trustees or committee have earmarked for a particular project or use. The Charity Commission describes designation as administrative only: it does not legally restrict the money, so the people who designated it can release it back to the general fund.
Designated funds are shown as part of the unrestricted funds in the accounts, usually with a note of what each is for. Money properly designated for essential future spending can be left out of a charity’s reserves. Because a designation is a decision of the trustees or committee, it is good practice to minute both setting it up and releasing it.
Worked example
A cricket club’s committee minutes that £1,500 of the general fund is set aside towards a new roller next year. The £1,500 shows as the Roller fund, a designated fund; if the club is offered a roller for free, the committee can release the £1,500 back to the general fund at its next meeting.
Common mistake
Labelling a designated fund as restricted. Calling the committee’s own earmark “restricted” tells the examiner and the members that a donor tied the money, which is not true, and makes the general fund look smaller than it is.
Grounded in Charity Commission — Charity reserves: building resilience (CC19) guidance. Figures last checked . General information, not tax advice.
Related terms
Unrestricted fund
Money the trustees or committee can spend on anything within the organisation’s purposes.
Restricted fund
Money given for a stated purpose, to be spent only on that purpose.
Receipts and payments account
A small charity’s or club’s cash-based accounts: money in, money out, and the balance.
Independent examination
The lighter check of a smaller charity’s accounts, instead of an audit.
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Questions about this term
Designated fund: common questions
- Who decides that money becomes a designated fund?
- The trustees of a charity or the committee of a club, usually by a minuted decision. Nobody outside the organisation is involved, which is exactly what separates a designated fund from a restricted one: there is no donor’s or funder’s condition behind it.
- Can a designated fund be spent on something else?
- Yes, if the trustees or the committee decide so. Because a designation is their own administrative earmark, they can release it back into the general fund or point it at another purpose; minute the decision so the next treasurer and the examiner can see why the fund moved.
- Are designated funds shown separately in a charity’s accounts?
- They are shown within the unrestricted funds, usually as separate lines or in a note saying what each is for. That lets a reader see how much unrestricted money is already earmarked and how much is genuinely free, without mistaking the earmark for a legal restriction.
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