Fund accounting | Trustees’ Short Guide Series

Effective fund accounting is essential for ensuring charities remain compliant, transparent and accountable to donors, funders and regulators. Our Fund Accounting Guide provides trustees and charity leaders with a practical overview of the different types of charitable funds and how they should be managed, reported and disclosed under SORP 2026.

This concise guide is designed to help you understand the principles of fund accounting, apply restrictions correctly and ensure your charity’s financial reporting accurately reflects the purpose and use of its funds. Using this guide, you’ll learn:

• What fund accounting is and why charities must distinguish between unrestricted, designated, restricted and endowment funds
• The key characteristics of restricted income funds, permanent endowments and expendable endowments, and how each should be managed
• How trustees can use designated funds to support future projects and commitments whilst maintaining flexibility over resources
• When and how transfers between funds should be made, including transfers relating to fixed assets and restricted funding arrangements
• Which costs can be charged to restricted and endowment funds, and how support costs should be allocated appropriately
• How fund movements and balances should be disclosed within the charity’s accounts to meet SORP requirements
• What trustees should do when restricted funds are in deficit and how future funding or transfers may address shortfalls
• Why effective tracking, reporting and governance of charitable funds is essential for compliance, transparency and stakeholder confidence.