Fund Accounting - Nonprofit Organizations

Nonprofit Organizations

Nonprofit organizations generally use the following five categories of funds.

• Current fund – unrestricted. This fund is used to account for current assets that can be used at the discretion of the organization's governing board.
• Current funds – restricted use current assets subject to restrictions assigned by donors or grantors.
• Land, building and equipment fund. Cash and investments reserved specifically to acquire these assets, and related liabilities, should also be recorded in this fund.
• Endowment funds are used to account for the principal amount of gifts the organization is required, by agreement with the donor, to maintain intact in perpetuity or until a specific future date or event.
• Custodian funds are held and disbursed according to the donor's instructions.