Designated funds

Designating a fund is a planning tool, not a legal restriction. Trustees take some unrestricted money and earmark it — say, towards a future building repair — so the accounts show it is spoken for. It is a useful way to be transparent about commitments without pretending the money is restricted.

A designation is a trustee decision about unrestricted funds and can be reversed by the trustees, which is what distinguishes it from a legally binding restricted fund. (Source: Charities SORP fund accounting; GOV.UK, Charity reserves (CC19), accessed 9 July 2026.) If plans change, trustees can move designated money back into general funds.

Explain any material designations in your Trustees’ Annual Report, and be honest about why the money is set aside — funders can tell the difference between a genuine commitment and reserves hidden behind a label. See fund accounting in the UK Charity Compliance Handbook.