Donor-imposed condition definition

What is a Donor-Imposed Condition?

A donor-imposed condition is a future event or an uncertain event that can result in the return of a donated asset or the elimination of an obligation to transfer an asset.

Examples of Donor-Imposed Conditions

Here are several examples of donor-imposed conditions:

  • Project-specific use. A donor stipulates that a $1 million donation must be used for an upgrade to a museum. If the upgrade is not done, then the funds are to be returned.

  • Matching requirement. A donor contributes $5 million, on the condition that the receiving nonprofit finds other donors to match the funds. Any funds not matched must be returned to the donor.

  • Challenge grant. The recipient organization only receives a $500,000 donation if it receives at least $2 million from other sources. If not, then the donor does not issue the funds.

  • Geographic condition. A donor will only issue a $200,000 donation to a school lunch program if all of the funds are used at schools within a specific city.

  • Time-specific use. A nonprofit must use the entire amount of a $10 million donation within three years, or else any remaining funds must be returned to the donor.

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