Earmarking refers to the practice of setting aside funds for a specific purpose, often within a legislative framework. This means that certain amounts of money in a budget are allocated for designated projects or areas, ensuring they are used for their intended purposes and not diverted elsewhere.

In its most basic sense, to earmark is to flag something for a specific purpose. In practice, it generally means to set funds aside for a particular project. A company might earmark a sum to spend on upgrading its IT system, or a city government might earmark the proceeds of a municipal bond issue to pay for a new road or bridge.

Earmarking is the process of appropriating money aside for a specific purpose. The term is used in several contexts; for example, in congressional appropriations of taxpayer funds to individual practices like mental accounting. In the case of organizations, the term relates to how companies or governments budget spending.

By definition, an earmark is congressional funding for a specific local project. As old as the nation itself, they have often been pet projects of powerful lawmakers and, at times,...