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The Presbytery of Glasgow. Conference Restricted Funds and Ministry & Mission Contributions. Restricted Funds. Voluntary incoming resources subject to specific conditions which arise either from a donor’s wishes or from the terms of an appeal. Effect on how money can be spent.

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Restricted Funds

  • Voluntary incoming resources
  • subject to specific conditions

which arise

  • either from a donor’s wishes
  • or from the terms of an appeal

Effect on how money can be spent

  • Can only be used for the purpose for which it was given
  • though it is usual to charge a fair proportion of the overheads involved in administering the fund

(not likely to be significant in most cases)

  • Means need a separate restricted fund for each purpose

Potential Problems

  • Insufficient funds received

If Church unable to top up fund may mean purpose can’t be fulfilled

  • Excess funds received

Having fulfilled purpose left with funds which can’t be used

  • What happens ?

At present the only options are to return the monies to the donors or to hold the fund in abeyance until an appropriate use can be found (if ever!).

  • Provision was included in the Public Services Reform (Scotland) Act 2010 for applications to be made to OSCR for a Scheme in order to use the money for another purpose but the section has still to come into force and there is no indication when it might.
  • In any event it was envisaged for use to tidy up historical funds not to manipulate current ones.

“variation of purpose” clause

  • One could include a “variation of purpose” clause in an appeal along the lines:-

In the event of there being insufficient funds to carry out the project or in the event of a surplus arising on the project, any unspent funds will be used for the general purposes of the charity.

  • It might be accepted if an extra £2,000 was received for a £50,000 project but if £25,000 was received and the project cancelled the reaction might be very different.

M&M Contribution’s Income Base

Each congregation’s income base shall include

(a) General Fund income;

(b) Ministry income (including glebe rents, Consolidated Stipend Fund and local stipend endowment income);

(c) Fabric Fund and Reserve Fund income (including income in Fabric Funds held by the General Trustees);

(d) Net property rental income;

(e) A percentage of contributions from outside agencies for the use of premises, if in excess of a sum to be determined by the Council of Assembly;

(f) Any other regular income which is available to meet ordinary expenditure.


Rider to Income Base

For the avoidance of doubt,

  • legacies or capital receipts, such as the proceeds from the sale of property or investments;
  • special collections for other charities;
  • income in temporary capital funds for major projects, such as the refurbishment of the church or the building of a new hall; or
  • income from external funding sources which is specifically to meet the costs of a specialist worker,

shall be excluded from the Income Base.


Effect of M&MC Regs. on Restricted Funds


Effect of Restricted Funds on M&MC Regs.


and therein lies a danger



  • As you will see the regs do not differentiate between restricted and unrestricted funds
  • What matters is whether it is regular income to meet ORDINARY expenditure
  • Only where restricted funds are given to pay exceptional expenditure are they excluded from the income base
  • Example: boiler repair and annual maintenance check √

installation of new heating system in church X


Care should therefore be taken when creating restricted funds

  • May adversely affect the Trustees ability to run the charity
  • Don’t necessarily prevent funds from being assessable, but
  • Could prevent them from being used to meet the contribution
  • There then could be questions around the personal liability of trustees and whether they acted in the best interests of the charity in requesting the income be restricted.

Even when they must arise (when a donor places a restriction on the use of the funds) trustees should consider - is it in the best interest of the charity to accept the gift.


Accounting treatment for

  • Collections for Third Parties
  • Refunds
  • Donations from congregational organisations
  • Income transferred from General Trustees
  • Difference between funds with General Trustees and Investors Trust

Questions should be addressed to:

The Convener of Ministry & Stewardship