What does the Principal Access box mean and what is it used for?

The principal access box indicates whether the fund agreement allows for the principal balance to be invaded.

Principal Access box is located on the Fund 1 tab in the Fund Module.  It is frequently used in conjunction with the Endowment box.

This box is used to indicate whether the fund agreement allows for the principal balance, or the endowed balance, to be invaded or spent. Various state and federal accounting rulings have changed the nature of principal access over time so the use of this box among the various users has also changed over the years.  The box is used strictly in reporting and affects no processing so it can be used and interpreted depending upon your present needs.

For most, the box is checked when an endowed fund has language in the fund agreement that allows for the invasion of principal.  Since most fund agreements signed today give full variance power to the board of directors, this indicator is typically a sign of intent by the donor, and not a binding agreement. You can select on the value of the box in most reports that allow selection on the fund table.