What Are Encumbered Funds?


Encumbered funds are funds already committed to something. Business and non profits both often deal with encumbered funds. Business generally deal with the situation when trying to find finances to purchase something. If the funds are encumbered they can only access the specific amount of money assigned to purchase the item. Churches most often deal with encumbered funds when accepting a donation that comes with a stipulation as to what donated funds must be used for.
Q&A Related to "What Are Encumbered Funds?"
Thought I'd improve upon the answer someone else provided below. To clarify the differences between encumber and incumbent: Encumber, is to impede, hamper or burden someone or something
A mutual fund is defined as a professionaly managed investment vehicle that is made up of pool of funds collected from many investors and invested in stocks,bonds,money markets and
encumber: hold back
Encumber: To put a heavy load on; burden; To hinder or impede an action; To burden with
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