Which type of revenue is classified as “unrestricted” in a nonprofit context?

Unrestricted revenue in a nonprofit context refers to funds that can be utilized for any purpose the organization deems necessary, with no limitations or stipulations imposed by donors. This type of revenue is critical for the operational flexibility of a nonprofit, as it allows for the allocation of funds to various programs, administrative costs, and other needs that may arise.

The nature of unrestricted revenue stands in contrast to revenues that are designated for specific projects or purposes, which cannot be redirected by the organization for other uses. Such restrictions create limitations on how the funds may be applied, thereby impacting the organization's overall financial flexibility. Unrestricted revenue ensures that the organization can allocate resources where they are most needed at any given time, thus supporting broader strategic goals and operational efficiency.