A grant differs from a donation in that the organization usually must meet certain conditions before it has a legal right to the funds. The most common grants come from government agencies or from other organizations. These are often referred to as “earmarked funds.”
Lottery proceeds, project funds, and transfers from parent or sister organizations or NORAD are examples of grants.

Examples of conditions:
– Have at least a certain number of members.
– Carry out their projects in a specified manner and with limited administrative costs.
– The funds must be used to invest in, build, or carry out a project.

Grants that are not used during the fiscal year must be recorded as Liabilities on the balance sheet.

Take me to “Funds Raised”

Back to the chart of accounts
Glossary – Activity-Based Accounting