Understanding how SCORE funds are classified helps ensure chapters stay compliant and make the best use of available resources. Below is an overview of when funds are considered restricted versus unrestricted, and how each should be managed.
🔒 What Are Restricted Funds?
Restricted funds are legally or contractually limited in how they can be used. These restrictions are typically set by donors, grantors, or regulatory agreements.
Examples include:
Donor-Restricted Funds – Contributions earmarked for specific programs, timeframes, or capital projects.
Grant Funds – Awards that specify allowable uses.
Endowment Funds – Principal amounts that must remain intact; only earnings may be used.
Board-Designated Funds – Internally set aside by the Board for special purposes (not legally restricted).
Accounting Treatment:
Restricted and unrestricted funds are reported separately on the balance sheet.
Cash flow statements reconcile beginning and ending balances for both.
Net assets are classified as either donor-restricted or without donor restriction.
🏛️ SCORE’s Federally Restricted Funds
Because SCORE receives Federal funding through the SBA Notice of Award, certain services and revenues are classified as restricted.
Under this agreement, SCORE is funded to provide mentoring and educational services (workshops and webinars). All revenues generated from these services are therefore considered Federally Restricted, even if local sponsors or funding partners are involved.
Use of Federally Restricted Funds must be:
Allowable – Must follow Federal cost principles (no alcohol, gifts, etc.).
Allocable – Must apply to a specific fiscal year.
Reasonable – Requires three bids for expenditures over $10,000.
Necessary – Must support SCORE’s contracted services.
-
Compliant – Must follow SCORE’s expense and procurement policies.
| Type | Definition | Examples |
|---|---|---|
| Field Restricted Funds | Funds with a signed agreement that requires returning unused funds to the funder. These use a separate activity code for tracking and may carry over to the next period if allowed by the award. | Federal awards, local grants, or sponsorships supporting mentoring or workshop programs. |
| Field Unrestricted Funds | Funds raised locally that are not part of the SBA Notice of Award and not counted as Engage services. | Local sponsorships, donations, or event proceeds from CEO Forums, Small Business Owner Events, or Women Business Owner Forums. |
✅ Key Takeaway
If a program or funding source supports SCORE’s SBA-funded services (mentoring, workshops, or webinars), it’s restricted. If it supports local initiatives outside of those services, it’s unrestricted.
If you have questions, review the When are SCORE funds Restricted vs Unrestricted? document or reach out to your RVP.
Comments
0 comments
Please sign in to leave a comment.