Restricted Building Fund or Hidden Subsidy?

How New Marcha Donations Are Paying Bills and Tax Debts – And Why This Is a Clear Violation

In January 2026, the Serbian Orthodox Diocese of Eastern America released an update on New Marcha Monastery claiming a “restricted” building fund remains untouched at $241,915, raised solely for constructing a new monastic dwelling and related facilities. Donors were repeatedly assured their money would go exactly for that purpose—not for paying the monastery’s everyday bills. But the diocese’s own financial reports for 2023 and 2024 reveal the opposite: restricted donations are effectively keeping the monastery afloat, covering operating expenses instead of building the house.

This isn’t a one-time mistake. It’s a pattern. And it is a blatant violation of donor intent and the law on restricted funds.2023: A Huge “Other Income” Bailout

Ordinary/unrestricted income (general donations, candle sales, slava, misc): $24,885.

Ordinary expenses (maintenance, utilities, groceries, insurance, etc.): $58,529.

Operating deficit: –$33,644 (without the mysterious “Other Income”).

“Other Income” (large unexplained line): $87,876.

Overall net income: $68,362 — the entire surplus comes from “Other Income”.

Without that $87,876, New Marcha would have ended the year with a massive loss. What exactly is this “Other Income”? If it’s early building donations (as the diocese says fundraising began in late 2023), then restricted money was already being used to pay bills back then.2024: Even More Obvious – Restricted Donations Carry Everything

Building fund donations (explicitly restricted for construction): $151,483.

All other unrestricted income (candles, general donations, slava, misc): ≈$41,329.

Total expenses (general operations): $44,151.

Operating deficit without building fund: –$2,822.

Overall net income: $148,661 — the entire surplus comes from restricted inflows.

Same story: without the restricted building donations (including the $100,000 from timber harvest), the monastery would be in the red. The restricted money isn’t “untouched” — it’s the only reason the balance sheet isn’t negative.

Why This Is a Clear Violation

Under IRS rules for 501(c)(3) organizations and FASB accounting standards (ASU 2016-14):Donations given for a specific purpose (“construction of the monastic dwelling”) are donor-restricted.

Restricted funds may only be used for that purpose — they cannot subsidize regular operations, even indirectly.

When regular operations consistently run deficits and restricted inflows create an artificial surplus, this commingles funds and violates donor intent.

Donors gave money to build the house, not to pay electricity, groceries, insurance, or tax debts.

The diocese insists the fund is “restricted and untouched” until construction begins. But the numbers scream otherwise: restricted money is the lifeline keeping the monastery solvent, year after year.

And 2025? Waiting for the Report – But We Already Know What Happened

We still don’t have the full 2025 financial report, but there is strong reason to believe the pattern continued — and that restricted money was used to pay the monastery’s tax bills. The New Marcha tax delinquency peaked at around $196–235 thousand, and in 2025 the diocese received partial exemption and a repayment plan. Who paid those installments? If it came from the building fund — that is a direct violation. Donors gave for bricks and mortar, not for the tax office.

Questions the Diocese Must Answer – Immediately and Publicly

To get to the bottom of this outrage, here are the key questions that demand documented answers right now:

What is the source of the 2023 “Other Income” line of $87,876? Is it building-related donations or something else? If restricted, why was it used to cover an operational deficit?

How are unrestricted operating expenses being covered without relying on restricted building fund inflows to create an artificial surplus? The 2023 and 2024 reports clearly show operations in deficit, offset by restricted money — how is this not a violation?

Why has the monastery been allowed to run chronic operating deficits for years (2023: –$33,644 without “Other Income”; 2024: –$2,822 without building fund), forcing restricted donations to pay bills instead of serving their intended purpose?

Can you immediately publish full balance sheets for 2023, 2024, and 2025 showing clear separation of restricted and unrestricted net assets, along with bank statements proving no commingling?

When will construction actually start, now that the Abbess was installed in January 2026? How many more months will restricted money wait while the monastery pays bills?

If restricted funds were used in 2025 to pay tax installments — how do you justify that? Donors gave for building the house, not for the tax authority.

Parishioners, donors, and the faithful are not fools. They gave in good faith — for a monastic home, not for tax debts and electricity bills. The diocese must stop making excuses and start answering. The numbers don’t lie. Trust has already been broken — and the 2025 report will only confirm what we already know.

Sources: Monastery financial reports for 2023 and 2024, Diocese update January 2026, IRS guidelines on donor-restricted funds.