What is expected of the unrestricted portion of an endowment's fund balance?

The unrestricted portion of an endowment's fund balance is expected to be expended for the fund's intended purpose. This means that the funds can be used as needed to fulfill the objectives outlined by the endowment, such as funding specific programs, initiatives, or operational costs that align with the mission of the organization. Unlike restricted portions, which have limitations on their use as specified by donors, unrestricted funds provide flexibility and enable organizations to respond to changing needs or opportunities that arise.

In the context of endowments, the unrestricted funds play a critical role in supporting the ongoing activities and goals of the organization. They can be utilized strategically to enhance the organization's effectiveness, whether that involves enhancing educational programs, supporting scholarships, or covering operational expenses.

Thus, the expectation that the unrestricted portion will be expended aligns with the fundamental principle of endowment management, which is to use the resources available to advance the mission and benefit of the organization.