The Case for Unrestricted Giving: Why It Matters More Than Ever

Nonprofits are the backbone of communities, tirelessly working to address critical issues ranging from education to environmental conservation. Yet, as family funders and institutional donors increasingly restrict their contributions to specific programs or projects, a troubling trend emerges: unrestricted giving is on the decline. This shift places an undue burden on individual donors, who often end up "holding the bag" for unglamorous but essential expenses like utilities, staff salaries, and operational costs.

Why Unrestricted Giving Matters

Unrestricted funds are the lifeblood of any nonprofit organization. They offer:

1. Flexibility: Organizations can allocate resources where they are needed most, responding quickly to emerging challenges or opportunities.

2. Sustainability: Covering operational costs ensures the long-term viability of programs and services.

3. Innovation: With unrestricted funds, nonprofits can experiment with new initiatives and scale successful ones without waiting for project-specific grants.

4. Support for the Unexpected: They help cover emergencies like unexpected heating or cooling bills, urgent repairs, or unplanned expenses that ensure continuity of operations.

5. Staff Morale: Unrestricted funds can support spot bonuses or incentives for staff who go above and beyond, boosting retention and engagement.

Without sufficient unrestricted funds, nonprofits risk stagnation or even collapse, regardless of how well-funded their programs are.

Practical Strategies for Raising Unrestricted Funds

Raising unrestricted funds in today’s restrictive funding climate requires transparency, creativity, and a clear policy. Here are actionable steps nonprofits can take:

1. Adopt a Written Policy for Unrestricted Giving

Every organization should have a clear policy stating that most funds raised are unrestricted. While it may not be feasible to raise 100% unrestricted funds due to the nature of institutional giving, a policy sets the expectation and guides your fundraising efforts.

2. Be Transparent in Your Messaging

Integrate messaging about unrestricted giving into every fundraising campaign. For example:

• Explicit Statement: “Your gift will not only help with this wonderful project, but it will also support many other critical initiatives. Thanks to your generosity, we can help children around the world.”

• Inclusive Call-to-Action: Use phrases like "...and other help," "...and other projects," or "...and other places" to subtly reinforce that donations support a broader mission.

• Excess Funds Statement: Include a line such as, “In the case that funds exceed the projects described here, we will use the money where it is most needed.” This ensures donors understand their contribution benefits the organization as a whole.

3. Offer Restriction Options

Provide donors with the choice to restrict or unrestrict their gifts:

• Negative Option Restriction: Add a checkbox on the donation form that says, “Use my gift where it’s needed most.” If unchecked, the donation defaults to the specific appeal.

• Positive Option Restriction: Conversely, state that donations are unrestricted by default but include a checkbox for donors who want their gift applied exclusively to a particular project. Most donors will leave this box unchecked, making their gift unrestricted.

4. Educate Donors About the Value of Unrestricted Giving

Many donors prefer to support specific projects because they feel a tangible connection to their gift’s impact. Educate them about the critical role unrestricted funds play in:

• Keeping the lights on

• Paying dedicated staff who execute programs

• Providing emergency support for unexpected expenses

• Offering professional development opportunities or spot bonuses for staff who go above and beyond

Highlight stories of impact made possible by unrestricted funds, such as expanding a program, hiring new staff, upgrading technology, or addressing emergencies like repairing a burst pipe or replacing a failing HVAC system.

Creative Ideas for Promoting Unrestricted Giving

To make unrestricted giving more engaging, consider these fun and catchy approaches:

1. The "Keep the Lights On" Fund

Frame unrestricted giving as the foundation that keeps everything running. Use phrases like:

• "Help us keep the lights on so our programs can shine."

• "Behind every success story is a light switch—your gift helps flip it on."

2. Naming Campaigns

Personalize unrestricted giving by letting donors “own” a piece of your infrastructure:

• “Adopt a Desk”: A $100 donation sponsors a workspace for a month.

• “Fill the Fridge”: A $50 gift stocks the staff kitchen for a week.

• “Fuel the Mission”: $25 contributes to transportation or energy costs.

3. Subscription Giving

Encourage monthly giving with creative branding:

• "Join our Mission Makers Circle—a little every month keeps our big work going."

• "Be a Sustainer Superstar—support us year-round."

4. Events with a Purpose

Host special events that highlight operational needs:

• Power Up Party: A fundraiser showcasing the technology or infrastructure supported by unrestricted funds.

• Behind-the-Scenes Tour: Invite donors to see how their unrestricted gifts sustain day-to-day operations.

5. Gratitude Campaigns

Thank donors creatively to reinforce the importance of unrestricted gifts:

• Send handwritten notes saying, “Your gift keeps our mission moving every day—thank you for fueling the heart of our work.”

• Share impact videos showing how unrestricted funds enable success across various programs.

6. Emergency Response Messaging

Highlight how unrestricted gifts provide flexibility during emergencies:

• "When the unexpected happens, your unrestricted support keeps us resilient."

• "Thanks to your generosity, we were able to repair our heating system during last winter’s cold snap."

7. Staff Spotlights

Showcase how unrestricted funds support your team:

• "Your gift helps us recognize and reward staff who go above and beyond for our mission."

• "Unrestricted funds help us invest in our team’s professional growth and well-being."

Conclusion

Unrestricted giving isn’t just a financial necessity—it’s a lifeline for nonprofits striving to fulfill their missions. By adopting transparent policies, educating donors, and creatively structuring campaigns, organizations can navigate the challenges of restricted funding while ensuring long-term sustainability. Let’s continue to champion unrestricted giving and celebrate the generosity that fuels the essential work of nonprofits everywhere.