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Q&A with the Executive Director: Understanding Unrestricted Funds

Updated: Jan 23, 2023

Executive Director, Lindsay Richardson, answers your questions about unrestricted funds.

What is an unrestricted fund?

Unrestricted funds, sometimes referred to as “discretionary funds,” are funds that allow the Community Foundation to determine how grant dollars will be used. In our case, the Community Foundation utilizes most unrestricted funds to fuel our grantmaking programs. An independent grant review committee and, ultimately, our board of trustees work together to ensure that funds are delivered to programs and projects that maximize the impact on the quality of life in local communities.

Can an unrestricted fund be restricted to a specific community?

Absolutely. In fact, that’s exactly how our affiliate community foundation funds were started in White Pigeon and Constantine. The Adele M. Gray Fund is a great example of a permanently endowed unrestricted fund established for White Pigeon—it’s provided in so many ways for the community there over the years. We also have county-wide unrestricted funds like the Patrick Arseneau Memorial Fund. At the end of the day, the donor establishing the fund can identify the local community or communities that will be eligible for support.

Why do unrestricted funds matter?

Unrestricted funds are powerful resources for communities. We know that the needs of today look different than the needs of the past, and the needs of the future will look different than those of today. Unrestricted funds allow communities to respond and adapt to changing needs over time. In the Sturgis area, unrestricted funds have met needs in the areas of education, housing, health, parks and recreation, the arts, and more.

Is there an example of a program or project that was only possible because of unrestricted funds?

Just as unrestricted funds allow us to respond to changing needs over time, these funds also provide communities the flexibility to respond to the unexpected. In 2020, we delivered more than $110,000 directly to individuals and businesses suffering emergency financial hardship due to COVID shutdowns. Overnight, residents found themselves out of work without knowing when they would have an income again. Because of unrestricted funding, we didn’t have to wait for a government response. We were able to work with local partners and deliver support to families and small business owners in desperate need of help during a situation we could have never anticipated. To me, that’s what community is all about—stepping up to help one another during our greatest trials, reminding each other that we aren’t alone.

If a fund is unrestricted, can my family still name it?

Yes! Many of our unrestricted funds are named for the individuals and families that established them. Donors choose how to name the fund at the time the fund is established.

If a fund is unrestricted, can my family still recommend grants?

Though it is possible to establish an unrestricted fund with an advisory committee, we would recommend Donor Advised Funds for those donors and families who wish to be more involved in the grant process. During the lifetime of the donor, Donor Advised Funds allow donors to make recommendations and support charities of their choice. Many donors may choose to have the Donor Advised Fund convert to an unrestricted fund for their community after their lifetime.

If you'd like to know more about unrestricted funds or other services we offer, please contact us!

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