I am an accountant and I deal with restricted funding daily.
Funds raised for a particular "restriction" such as playground equipment do not have to be totally spent on the equipment as long as the equipment is purchased. If you had a surplus, you can use that for other things because you met the restiction of purchasing playground equipment.
As long as you meet a donor's restriction, the total donation does not necessarily have to go to that restriction.
These rules fall under the AICPA's FASB 116 & 117.
If you fundraise with the intention of supporting your annual budget, do it with wording such as "The PTO raises funds for such things as playground equipment, field trips, etc." There is no specific promise there.
I'm not an accountant, and this is just my opinion, but in our PTO, we fundraise to support our annual budget that is submitted for approval at our first PTO meeting. If we earn more in fundraising than we expected, we'll have a vote later in the year to allocate it to something. That's like your first example: if we were to vote to allocate the $10k to a special long-term captial improvement project like a playground, so be it. I think maybe the opposite situation is more dicey: you promote a fundraiser for a specific cause like the playground fund, then later vote to spend the money on something else. Don't know the law here, but ethically that seems stinky.
I'm looking for information on how you all handle restricted versus non-restricted funds. Specifically, how do you determine what a "restricted fund" is? I have been trying to find out, and have even gone to the IRS website to get to the heart of the matter, but cannot find the answer yet. I read something that said that if your school raises money through a general fundraiser (like a Jog-A-Thon) and raises $10,000 (for instance), they cannot place these monies into a restricted account (let's say $1000 into a restricted account for playground equipment), because the money was not raised specifically for playground equipment. However, if someone gives $10,000 to the school and says it is to be used specifically for playground equipment, then that money can be deemed "restricted". I am looking for certain terminology through a credible source, as I know I will be questioned on this at our next meeting. I would like to go to the meeting with this information under my cap! Any help or hints on which websites to visit would be appreciated!
