When it comes to managing finances for non-profit organisations, societies, or charitable trusts in India, one of the most common confusions is around the terms corpus fund and general fund. Both sound similar and are crucial to an organisation’s financial health, but they serve very different purposes.
In this blog, we’ll walk you through the key differences between these two types of funds, why they’re important, and how you can manage them better with modern tools, online accounting software and inventory management software. We’ll also introduce how MargBooks makes this job easier and more efficient.
What is a Corpus Fund?
A corpus fund is the foundation stone of an organisation. It is a permanent fund that is usually built up over time through donations meant specifically to strengthen the financial base of the organisation. These donations are typically not meant to be spent but rather invested.
Only the income generated from this fund, such as interest or dividends, can be used for the day-to-day running of the organisation. The original amount, or principal, remains untouched.
Key points about a corpus fund:
- It is non-expendable. That means you cannot dip into it for regular expenses.
- Donations received towards the corpus are typically accompanied by a letter from the donor mentioning that the funds are meant for the corpus.
- The income earned from the corpus investments can be used for operations or programmes.
- It reflects the long-term stability and credibility of the organisation.
For instance, if an educational trust receives a donation of ₹5 lakh with a note stating it is for the corpus, the trust will invest that ₹5 lakh and only use the returns it earns.
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What is a General Fund?
On the other hand, a general fund is used for meeting the daily operational needs of the organisation. This includes salaries, electricity bills, maintenance, programme-related expenses, and so on.
Unlike the corpus fund, there are no restrictions on how this money can be used, unless a donor has specified a purpose.
Here’s what makes the general fund different:
- It is fully expendable and used for routine expenditures.
- Donations without specific instructions usually go into the general fund.
- It helps the organisation function smoothly daily.
- It covers all administrative, staff, utility, and programme expenses.
If someone contributes ₹50,000 without any instructions, that amount will typically go into the general fund and can be used as needed by the organisation.
The Core Difference Between Corpus Fund and General Fund
At its heart, the difference lies in usage and intent.
- The corpus fund is meant for long-term security and cannot be spent directly. It acts more a savings reserve for the future.
- The general fund is for immediate use and keeps the organisation running smoothly in the present.
So, while one ensures the future, the other supports the present.
Importance of Fund Management
Efficient fund management is vital for the sustainability of any non-profit or charitable trust. Mismanagement can lead to trust issues with donors, failed audits, or even legal trouble.
That’s why having clear segregation and proper records of your corpus and general funds is not just good practice—it’s necessary.
How Online Accounting Software Helps?
Gone are the days of managing donations and expenses in handwritten registers or complicated spreadsheets. With modern online accounting software, MargBooks, tracking and managing funds have become much simpler, faster, and more accurate.
Here’s how MargBooks can make a difference:
- Automatically segregates corpus and general donations based on donor input.
- Tracks fund utilisation and interest income from corpus investments.
- Generates detailed reports for audits and donor transparency.
- Ensures compliance with accounting norms and regulatory standards.
And since it’s online, you can access your financials from anywhere, anytime—perfect for organisations with multiple branches or remote teams.
The Role of Inventory Management in Nonprofits
While managing funds is crucial, many NGOs and trusts also handle physical items like medicines, books, food grains, or relief materials. That’s where inventory management software comes into play.
MargBooks comes integrated with inventory features that allow you to:
- Track incoming and outgoing stock in real-time.
- Monitor inventory at different locations.
- Set alerts for low stock or expiry dates.
- Maintain donor-wise inventory records (great for in-kind donations).
This ensures not just financial accountability but also operational efficiency.
Why Marg Books?
For organisations in India whether large trusts, small NGOs, or even educational institutions Marg Books offers a complete package. It’s more than just accounting software. It’s a financial partner that:
- Simplifies fund tracking
- Maintains donor records
- Supports multi-branch operations
- Offers both accounting and inventory features in one place
With easy-to-use dashboards, custom reports, and GST-ready tools, MargBooks takes the headache out of financial management so you can focus on your mission.
Final Words
To sum it up, both the corpus fund and general fund are essential to the health of any non-profit. Understanding the difference between them helps you maintain transparency, build donor trust, and plan for the future more strategically.
Using online accounting software, MargBooks, not only keeps your finances in check but also helps you manage your operations more efficiently, especially when integrated with inventory management software.
Whether you’re just getting started or looking to improve your current system, Marg Books is a reliable solution trusted by thousands of Indian organisations.