A general fund is a pool of financial resources used by non-profit entities such as governments and universities to cover operating expenses, services, and payroll. The money comes from various sources, including taxes and tuition, and is divided among different needs. It is a necessary element for many organizations.
A general fund is a financial term that refers to the pool of financial resources of a nonprofit entity. This term traditionally refers to a fund used by a government or university, because for-profit companies use a general ledger to control finances. From a general fund, all operating expenses, services, and employee payroll are provided. The money for this fund comes from various sources, depending on the institution.
When politicians and school officials talk about balancing a budget, they mean the general fund. It covers a surplus of money used to operate. In most cases, annual votes are taken to determine exactly how the fund will be spent. In government, especially, this is a source of much debate.
A government’s fund attempts to finance all necessary services for its citizens. Health and human services, education, the justice department, public safety, and the general costs of operating the government are among the main focuses for a government. Things like community development, transportation, and saving a portion for disasters are other smaller operating bills in a government budget.
A university or school has an entirely different set of content that makes up its general fund. These institutions often spend the bulk of their finances on housing, home loans, maintenance, and administrative costs for teachers and staff members. Colleges must also set aside money for landscaping, health and human services, as well as to maintain a general savings fund.
The money that makes up the fund comes from a wide variety of locations for governments and universities. Most of a government fund comes from taxes. It doesn’t matter if it is a state, local or national government, the taxpayers are primarily the people who help finance the services and operation. Beyond taxes, a government earns other revenue from running a surplus from the old fund, from interest on investments, and from charging fees, such as park entrance fees.
A school earns its income primarily from tuition. When students pay tuition, that money is sent to the general fund and then divided among the many areas of need. Governments also contribute to the general funds of schools, especially if the school is run by the government. Donations from organizations and alumni are another source of income, as are fees for things like admission to sporting events.
General funds are a necessary element of many organizations. By drawing revenue from a variety of sources, governments and schools determine their annual budgets. These funds are divided among many different needs to continue operating.
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