Which funding source is considered a long-term investment?

Capital funds are designed for significant investments in long-term assets, such as buildings, equipment, or infrastructure. These funds are not typically used for day-to-day operational expenses; rather, they are allocated for projects that will provide benefits over a prolonged period. Investing in capital assets helps organizations improve their capabilities and efficiency, often resulting in long-term savings and enhanced service delivery.

Operational funds, on the other hand, are intended for short-term expenses and regular day-to-day operations. Grants may vary in their terms and might not be dedicated to long-term projects. A budget surplus represents excess funds from a budget period but isn’t inherently a designated source for long-term capital investments. Thus, among the options presented, capital funds are the most appropriate choice for representing a long-term investment.