Which of the following statements would be classified as a donation with donor restrictions when a building fund is restricted and pledges are expected next year?

• A. Cash restricted to the building fund
• B. Cash unrestricted
• C. Pledges for unrestricted use
• D. In-kind donations for building improvements

Answer: (D)

Donor restrictions come from donor-imposed conditions on how the resources may be used. When a fund is set aside for a building project, gifts that are explicitly restricted to building improvements are donor-restricted contributions. An in-kind donation for building improvements clearly meets that idea: it is a noncash gift whose use is limited to the building project, so it is recorded as a temporarily restricted inflow until the asset is placed in service.

Unrestricted cash isn’t limited by donor conditions, pledges expected next year are promises not yet received as cash, and cash restricted to the building fund is restricted by purpose but the scenario emphasizes the noncash example of donor restriction tied to a specific project, which is the in-kind donation for building improvements.