Nonprofits have net assets that are unrestricted, temporarily restricted, and permanently restricted. If the net assets are classified as permanently restricted the organization is restricted from using those assets freely and must adhere to the request of the donor. However, in times of economic downturn, many nonprofits experience a decline in donations and cash flow issues. In the search for cash, many have wanted to tap into restricted assets, and some do.
Do you agree or disagree with organizations doing this? Please do some research and see if you can come across an example of this taking place. How did it turn out for the nonprofit? What are your thoughts on this issue? Please provide a link to any articles you find on this topic.