What are Permanently Restricted Net Assets?

Permanently restricted net assets are assets held by a nonprofit entity for which donors have imposed usage restrictions that do not expire. Donor permission must be given in order to alter these restrictions. Permanent restrictions are most commonly found when donors contribute large sums to nonprofits, and so are more inclined to control how the funds are used.

Nonprofit entities try to steer most donations away from the permanently restricted net assets classification, so that the contributed funds can be used for ongoing administrative activities and programs.