Charities should regularly review their reserves to make sure they have enough funds to manage unexpected costs while continuing to deliver their services.
Charities should regularly review their reserves to make sure they have enough funds to manage unexpected costs while continuing to deliver their services.
Reserves are funds that a charity keeps aside for future needs, emergencies, or unexpected financial pressures. Trustees should understand why the charity needs reserves and agree on an appropriate reserves level based on the organisation’s circumstances.
A good reserves policy should explain how much the charity aims to hold, why it needs these reserves, and what the funds may be used for. It is important to review the policy regularly, particularly when the charity’s income, expenditure, funding arrangements or activities change. Find out more here.