5 Steps to Reduce Unspent Fund Balances at Your Institution

Whether you’re in higher education, healthcare philanthropy, or at a community foundation, unspent funds are one of the most visible challenges inside organizations. According to the 2026 Fund Management and Stewardship Benchmarking Survey, the average institution has 20% of its funds sitting unspent, and 62.7% of organizations report more than 10% of their fund portfolio untouched. Across 174 respondents that provided dollar estimates, that adds up to $7.6 billion in philanthropic dollars waiting to be put to work.

The cause is rarely a lack of desire, intention, or leadership buy-in – it’s an information visibility challenge. As one higher education respondent put it: "We have millions of dollars in unspent funds because the administrators either don't know the fund exists, the fund terms are too restrictive, or they cannot see the money in the fund."

That quote contains the roadmap. Here are five steps to work through it.

Step 1: Pull a Complete Utilization Report

You cannot address what you cannot see. Start by generating a report that shows every fund in your portfolio alongside its current balance, date of last expenditure, and any spending deadlines tied to the fund agreement.

If your system does not produce this view natively, another option is to build it from a data export. The minimum fields you’ll need to get started include:

• Fund ID and name
• Restricted purpose or department
• Current balance
• Date of last transaction
• Original agreement date
• Contact assigned to the fund (if any)

Filter immediately for funds with no activity in the past 12 months and a balance above your institution's minimum threshold. That subset is your working list.

Step 2: Classify Each Fund by Root Cause

Not all unspent funds have the same problem, and they should not all get the same solution. Once you have your list, sort each fund into one of three categories:

Awareness gap: The department contact does not know the fund exists, has changed, or has never been formally introduced to it. This is especially common with older funds or departments that have experienced turnover.

Restriction barrier: The fund terms are written too narrowly to match available spending opportunities. A scholarship restricted to a program that no longer enrolls students, for example, will never spend down without a formal modification.

Process gap: The contact knows the fund exists but does not know how to submit an expenditure, what documentation is required, or who to contact for approval.

Tagging each fund with its root cause will let you route it to the right intervention instead of sending the same generic outreach to every department.

It’s also worth noting that this is both the most important and most laborious task. In order to take effective actions, we need to have a clean, organized view.

Step 3: Prioritize by Balance Size and Fund Age

You likely will not have capacity to address every dormant fund at once (but kudos if you do!). Rank your working list using two variables: balance size and time since last activity.

A practical scoring approach is to assign points for each. Funds over $25,000 get one point. Funds over $100,000 get two. Funds dormant for more than three years get one point. Funds dormant for more than five years get two. Add the scores and sort descending.

This gives you a defensible order of operations, puts your largest financial exposures at the top, and surfaces funds most likely to trigger donor concern or audit scrutiny if left unaddressed.

Step 4: Reach Out to Department Contacts with a Fund Summary

Generic reminders do not move people to act. When you contact a department, give them exactly what they need to take the next step. A one page fund summary is a great way to provide relevant context without overwhelming your recipient. You can include:The fund name and purpose, written in plain language

• The current balance available to spend
• What types of expenditures are eligible under the agreement
• The submission process and any deadlines
• Your direct contact information

Send this to the department chair or administrative contact, not a general inbox. Follow up within two weeks if you do not hear back. If the contact has changed, work with advancement records to identify the correct person before sending.

For awareness-gap funds, this outreach alone often produces results. Departments are frequently grateful to learn about resources they did not know were available.

Fund Management is relationship work. This outreach will also serve as a foundation to build deeper relationships with fund managers across the organization.

Join The Mine

The peer community for fund management and fundraising professionals.

Step 5: Escalate Restriction Cases and Build a Spending Plan for the Rest

Funds that fail to move after outreach typically need one of two interventions.

For restriction-barrier funds, you can initiate a formal modification process. This usually involves reviewing the original gift agreement, determining whether the restriction can be amended under the institution's gift acceptance policy or state law, and reaching back to the donor or their estate if the fund is new enough to allow it. Make sure to document every step so you have an audit trail.

For funds where the contact is engaged but spending is slow, build a simple spending plan with the department. Set a quarterly target, identify two or three eligible expenditures they can make in the next 90 days, and schedule a check-in. Written spending plans, even informal ones, dramatically improve follow-through.

At the portfolio level, flag funds that remain unspent after 60 days of active outreach and escalate them to your fund management committee or finance leadership. Funds sitting dormant for multiple fiscal years may require board-level review depending on your institution's policies.

Key Takeaways

• Start with a utilization report. You need a clean view of every dormant fund before you can prioritize or act.
• Root-cause classification determines the intervention. Awareness, restriction, and process problems each require a different response.
• Prioritize by balance and age to focus limited team capacity where it matters most.
• Personalized outreach with a fund summary is more effective than mass reminders.
• Pair escalation paths with spending plans so department contacts have a clear route forward.

The 2026 benchmarking data shows that monitoring utilization is the hardest fund management task and has the lowest rate of formal procedures. Building even a basic annual utilization review into your workflow puts your institution ahead of most.

How FundMiner can Help:

With FundMiner your team gets a live view of every fund in your portfolio, including current balances, transaction history, spending deadlines, and assigned contacts, so the utilization report in Step 1 is always ready, not a quarterly fire drill.

Dormant funds can be classified, prioritized, and tasked with the right intervention without stitching together spreadsheets and manual exports. Personalized fund summaries are easy to generate and distribute at scale, so department outreach is timely, relevant, and tracked. And when spending is slow to move, automated follow-up workflows, spending plan tracking, and escalation alerts surface the right funds to the right people before they become audit concerns.

If your institution is sitting on unspent funds, the biggest roadblock is usually information infrastructure. Schedule a discovery call with FundMiner to see how we can help you put that philanthropic capital to work.

Want to See FundMiner in Action?