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Reserves
Submitted by Martin Davies on 10 April, 2008 - 12:32.
Hi everyone.
Does anyone know if a charity is required to have a reserves policy at the moment?
Charity outgoings about £115k a year.
Many thanks.
Martin
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Thanks
Thanks Gerry and Sandre.
Good advice as always.
Martin
Reserves
Hi, Martin
Best practice says yes, but Sandre has the law correct.
What we've found is that the simple fact of having one seems to encourage good habits - smaller charities especially consider it a success if they survive the year, whereas having a reserves policy sets the bar a little higher, and leads to better budgeting.
Cheers
Gerry
Gerry Beldon FInstF
Director, 26-01 CIC
www.26-01.com
Reserves - the official line
http://www.charity-commission.gov.uk/publications/cc19.asp
I am not a lawyer ... however, it seems that only 'larger charities' are required to have a reserve policy.
How large undefined, of course.
However, a single line appears to satisfy in our report: The trustees review the level of reserves periodically to ensure that the trust is able to fulfil its potential grant commitments.
If our reserves were significantly higher than this, then I suspect that an explanation or designation would be called for.
HTH
Sandre
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