The changing economic landscape has forced many not-for-profit organizations to take a hard look at the need for a reserve fund and how they can dip into their reserves to keep their operations afloat.
Importance of Reserve Funds for Not-For-Profit Organizations
However, planning for unforeseen events like COVID-19 is one of the many reasons why organizations should have a reserve fund. Your organization should also have a reserve fund in order to:
- Plan for the long term and set aside reserves to purchase large capital assets
- Plan for new programs to stay relevant in lieu of the changing socio-economic and demographic factors
Furthermore, if an organization’s funds are not reserved, they could appear to have more cash to sustain their operations, when they actually need the funds to purchase significant assets. Ultimately, reserve funds are a great tool for organizations to help manage and plan for the long-term and unforeseen future challenges.
Demystifying Reserve Funds Webinar with Charity Village
This October, we partnered with Charity Village on the “Demystifying Reserve Funds” webinar to talk about the importance of reserve funds and how organizations can establish their own reserves to tide through the economic downturn.
During the webinar, we took a dive into:
- Common Misconceptions about Reserve Funds
- Types of Reserve Funds and Challenges
- How to Establish a Reserve Fund
- How to Determine the Right Amount of Reserve
- Best Practices for Managing your Reserve Funds
- External Audit Considerations
If you missed out on the live session, here’s a recording of the webinar for you to watch on-demand. You can also download the slides and our list of considerations for restricted funds resource below. Enjoy!