What is the difference between earmarked fund and corpus fund in trust?
CA.KUNJAR SHAH (CA in Practice) (61 Points)
26 December 2009What is the difference between earmarked fund and corpus fund in trust?
Bhavesh
(Practising CA)
(282 Points)
Replied 26 December 2009
Earmarked fund is for a specific purpose. Can be used only for that particular thing like building a wall or buying a new idol etc.
But Corpus is the main fund It may not be tied to a particular activity.
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 26 December 2009
To be sustainable, NGOs need to build up a strong organisation. Given the erratic nature of funding, developing a corpus/general fund is one way that NGOs can do this. When you donate to the corpus/general fund, this helps NGOs to design long-term programmes without worrying about programme support from aid agencies, and to meet organisational costs that no one else is willing to bear.
Essentially corpus/general fund donations are not earmarked for a specific purpose, and the NGO is thus free to use them as required [e.g., to meet fundraising costs, to conduct a training programme to upgrade skills of its own staff, or to launch a new project, etc.]
Funds in the general fund can be used at any time, whereas money in a corpus can normally not be touched - the organisation is supposed to use only the interest that accrues from investments made out of corpus donations, without touching the principal itself.
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