23 - How to Create and Manage Funds

What is a Fund?

A fund tracks money set aside for a particular purpose (a scholarship fund, a building fund, a charity fund) separately from your bank accounts. Where a bank account represents an actual account at a bank, a fund is an internal designation: money for a scholarship fund might sit in the very same checking account as your general operating money, but M2 lets you track how much of that checking balance is "spoken for" by tracking it as its own fund.

Every local starts with a general fund for money that isn't earmarked for anything more specific. You can create additional funds as your local needs to track money for particular purposes.

Before You Begin

You must have local financial write access to add, edit, or deactivate funds.

Getting Started / How to Access

1. Go to your local's dashboard.
2. Click the Income & Expenses tab.
3. Find the Funds card. It lists your active funds and their current balances.

Click the menu icon in the card for quick actions, or the open-in-browser icon to see the full list of funds, including inactive ones.

Adding a Fund

1. From the Funds card, click the menu icon and select Add Fund. (Or, from the full Funds list, click the + button in the card header.)

2. Fill out the form:

   Field	What to Enter
   Name	A name that identifies this fund, such as "Scholarship Fund" or "Building Fund." Required, and must be unique among your local's funds.
   Description	A note about what this fund is for. Optional.
   Starting Balance	The balance to start tracking from in M2. If the money is already in a bank account M2 tracks, leave this at 0.00. That money is already counted in a fund, usually your general fund, so entering it here counts it twice and Fund Reconciliation shows a difference equal to the amount. Move the money with a fund transfer instead (see How to Transfer Between Funds). Enter a starting balance only for money in a bank account you're adding to M2 at the same time, using that account's same amount and date (see How to Start Using Multiple Bank Accounts).
   Starting Balance As Of	The date the starting balance was accurate. Required if you enter a starting balance other than zero. M2 won't accept income, expenses, transfers, or adjustments on this fund dated on or before this date. If the starting balance is 0.00, leave this blank.

   

3. Click Save.

Editing a Fund

1. Go to the Funds list.

2. Click the pencil icon in the fund's row, or open the fund and click the pencil icon next to its name.

   

3. Update the fields as needed.

   

4. Click Update.

As with bank accounts, if the Starting Balance As Of date you save is on or after the fund's first entry, M2 moves the date to the day before that entry and changes the amount to match. M2 doesn't tell you it did this. The balance on the date you typed still equals the amount you typed, but the numbers you see after saving can be different.

Changing a fund's starting balance by itself shows up as a difference on Fund Reconciliation. To correct a starting balance on a fund and its bank account together, see How to Fix a Starting Balance.

Setting a Default Fund

Each line of a receipt or disbursement has a Fund. When you choose the account, M2 fills in that account's Default Fund or, if the account has none, your local's default fund. You can change the Fund on any line. Online payments follow the same rule automatically.

To send an account's money to the same fund every time, set that account's Default Fund in your Chart of Accounts. See Setting up Your Local Group's Chart of Accounts.

To make a fund your local's default fund:

1. Open the fund you want to make the default. A fund that is already the default doesn't show a Make Default Fund button.
2. Click Make Default Fund.

Only one fund per local can be the default at a time.

Deactivating or Removing a Fund

Before you start:

• If the fund still has money in it, move that money to another fund with a fund transfer (see How to Transfer Between Funds). Once a fund is inactive, Record Fund Transfer doesn't offer it, and its balance still counts in the Funds total on Fund Reconciliation.
• If the fund is your default fund, open another active fund and click Make Default Fund first. M2 doesn't stop you from deactivating or deleting the default fund. But an inactive default fund still receives online payments, and new receipt and disbursement lines still start with it selected, even though it appears grayed out in the Fund drop-down list.
• If any account in your Chart of Accounts uses this fund as its Default Fund, choose a different Default Fund for that account. M2 doesn't list which accounts use a fund. You see an account's Default Fund only when you open that account with its pencil icon, so open the accounts you use with this fund and check each one. Online payments to that account keep going into an inactive fund.

Then:

1. Go to the Funds list.
2. Click the trash icon in the fund's row.
3. Confirm when asked "Are you sure you want to delete this?"

What happens next depends on whether the fund has any history:

• If the fund has no recorded activity (no income, expenses, transfers, or adjustments, including voided ones), M2 removes the fund completely.
• If the fund has recorded activity, M2 marks the fund inactive instead, to preserve the history attached to it.

Inactive funds drop off the Funds card on the Income & Expenses page but remain visible, grayed out, in the full Funds list. Reactivate a fund at any time by editing it, turning the switch at the bottom of the Edit Fund window from OFF to ON, and clicking Update.

Tips

• Keep the general fund as your catch-all. You don't need a fund for every income and expense account. Use dedicated funds only for money you specifically want to track apart from general operations.
• A negative fund balance is worth watching. Fund balances are shown in red when negative, which usually means more has been spent from a fund than has come into it.
• Use the description field. A short description helps other officers understand what a fund is for without asking.

Troubleshooting

Q: I don't see the option to add or edit funds. A: You need local financial write access. Contact whoever manages permissions for your local.

Q: Can two funds have the same name? A: No. Fund names must be unique within your local, including inactive funds. M2 isn't case-sensitive when checking this, so "Scholarship" and "scholarship" would conflict. To use a deactivated fund's name again, reactivate that fund.

Q: What's the difference between a fund and a bank account? A: A bank account represents money at an actual bank. A fund represents an internal designation for a purpose, which may or may not correspond to a separate bank account. Many locals keep several funds inside a single bank account.

Related Guides

• 20 - How to Manage Bank Accounts
• 24 - How to View a Fund Ledger
• 25 - How to Transfer Between Funds
• Recording Member & Non-Member Payments
• 30 - How to Merge Duplicate Funds
• 29 - How to Reconcile Funds Against Bank Accounts
• 33 - How to Fix a Starting Balance

Glossary