In this process it is imperative to ensure that all “restricted income” is placed
into the proper program activity. Examples of restricted income would be a
grant for a specific activity, a donation for a specific project, or an internal
decision to restrict all income for veterinary services to be used for some
specified purpose. The restricted income should be allocated into the programs
for which it was intended. Other income would be considered “unrestricted.”
The manager should try to cover the most basic administrative costs with the
unrestricted income, and then allocate the remaining unrestricted income
across all the programs and activities. This process makes it easier to make hard
decisions later if the estimated expenses and income do not match.