Setting up gnucash for charity with project

[Dale Alspach]

What to do depends on what level of reporting you will need on the restricted 
funds. If the donor/grantor wants detailed accounting of expenditure of the 
funds, you may need to actually create a system of expense accounts specifically for the project. A second question is whether this is a one time deal or 
similar things are going to happen in the future.

Does the donor allow mingling of funds? If not, your organization will need 
an actual separate bank account. 

How does your governing board/committee want 
to see this in the organization's reports? 
Do the expenditures for the project 
need to be isolated from other expenditures?

If you do not need detailed accounting for the project, then you may be able to 
simply setup a subaccount of your operating funds asset account (usually a 
bank account). Place the restricted funds in the subaccount. When project 
expenditures are made, take them from the subaccount.

Dale