Home / Resources / Unrestricted grants for nonprofits
Updated August 2026
The most useful money a nonprofit can receive, and the hardest to ask for. Here is what it is and how to get more of it.
An unrestricted grant comes with no donor-imposed limit on how you spend it. You can put it toward salaries, rent, tools, a reserve, or the program that needs it most this month. It is the only grant money that can absorb a surprise.
| Term | What it means |
|---|---|
| Unrestricted | No donor-imposed restriction at all. Your board directs it. In your accounting it is net assets without donor restrictions. |
| General operating support | Given to support the organization rather than a specific project. Functionally close to unrestricted, and often used interchangeably, though a funder may still ask for a report on the organization as a whole. |
| Restricted | Limited by the donor to a purpose, a program or a time period. Spending it on anything else is not a judgment call, it is a breach. |
A fourth thing gets confused with these: board-designated funds. Money your own board has set aside for a purpose is still unrestricted, because your board can undesignate it. Only the donor can create a restriction.
Restricted grants fund programs. They rarely fund the organization that delivers the programs: the bookkeeper, the insurance, the audit, the person who answers the phone, the tools. An organization that is fully restricted-funded can be growing and still be one late reimbursement away from missing payroll.
Unrestricted money is also what lets you say no. A funder offering money for a program slightly off your mission is much easier to decline when your core costs are covered.
Two sources behave like unrestricted money and get overlooked. The first is indirect cost recovery on federal grants, now up to 15% of modified total direct costs under the de minimis rate. The second is unrestricted individual giving, usually the largest unrestricted source a small nonprofit has.
Often the most reachable unrestricted or general operating money for a small local organization. They are also the funder most likely to have a candid conversation about what you actually need.
Smaller family foundations tend to fund people and organizations they trust rather than projects they designed. Relationship-driven, rarely advertised.
Some larger foundations run explicit general operating support lines. These are competitive but they exist, and they are worth finding because they renew.
The most realistic route for most small organizations. A funder who has watched you deliver for three years is far more open to loosening restrictions than a new funder is to starting unrestricted.
Frequently unrestricted by default, simply because the giver has not built a restriction framework.
The conversation is much easier with someone who already believes in you. “Would you consider making next year's renewal general operating?” is a reasonable question to ask a three-year funder.
“Unrestricted” sounds like “we have not decided.” Say the specific thing: the audit, the second caseworker, the database that replaces four spreadsheets. Funders fund clarity.
If your program budget hides the true share of rent, insurance and admin, you teach funders that programs cost less than they do. Full-cost budgeting is the argument for operating support.
The strongest case for unrestricted money is a track record of using restricted money precisely and reporting on it on time.
Know what percentage of your income is unrestricted, and watch it over time. It is a better health indicator than total revenue.
Decide in advance, at board level, where unrestricted money goes by default, otherwise it dissolves into whatever is loudest that month. Many small organizations set a standing split. Some to operating reserve. Some to the costs no grant will cover. Some to the program closest to breaking. Writing that policy while no money is on the table is much easier than writing it afterwards.
This is general information, not legal or financial advice. Funder policies vary and change. Read each funder's own guidelines before relying on any summary.
The Ember tool for thisEmber Grants tracks every award, restriction, deadline and report in one place, so you always know which money is restricted and which is yours to direct, with unlimited users on every plan.
A grant with no donor-imposed limit on how it is spent. The organization's board decides how to use it, and in the financial statements it is recorded as net assets without donor restrictions.
They are close and often used interchangeably. Unrestricted means no donor restriction at all. General operating support is given to sustain the organization rather than a specific project, and a funder may still ask for reporting on the organization as a whole.
No. Only a donor can create a restriction. Money your board has set aside for a purpose is still unrestricted, because the board can change the designation.
Most often by converting an existing restricted funder at renewal. Also from community foundations, smaller family foundations, explicit general operating programs, and corporate or local business giving that is unrestricted by default.
Ember brings your programs, grants, volunteers, and donors into one place, built only for nonprofits, with a free tier and no credit card.
No credit card · Unlimited users included
Sources: General nonprofit finance practice. Verified August 2026. Funder policies vary; read each funder's own guidelines.