Smaller charities are often faced with a conundrum of restricted funds which are no longer usable as the project has finished or the need has disappeared. However the Charities Act 2022 has given at least some good news on that front.

They have introduced 4 new circumstances where the funds can be used:

• the donations are small (£120 or less),
• the charity would incur an unreasonable expense to return the donation
• where it would be unreasonable for donors to expect the return of the donation,
• or where donors cannot be found or identified

However there are two caveats

• The money has to be used for a similar charitable purpose and
• The fund must be £1,000 or less. Anything more than £1,000 and an application has to be made to the Charity Commission

In practical terms this is more likely to apply to public fundraising rather than grants as the 4 bullet points above is unlikely be met by grants. That doesn't stop you from asking the organisation who made the grant and in certain circumstances e.g if the sums involved are minimal or the grant paperwork gives you specific permission than this new legislation can be used.

It is therefore also important that your appeal wording gives some idea of what you would do with any surplus funds or seeks specific permission to apply surplus funds to other charity projects.

If you're in any doubt, then you should seek advice but charities with a whole raft of small amounts stuck in restricted funds now have a way to make use of them.