With many nonprofits struggling to meet higher service demands under trying economic circumstances, very few have any capital cushion to get by in an emergency. The Operating Reserves Toolkit for Nonprofit Organizations is a new resource to help nonprofits through the process of building a reserve policy.
The toolkit is the result of a rigorous, multi-year research, writing and review process by the Nonprofit Operating Reserves Initiative Workgroup. In 2009, the workgroup – led by the Urban Institute’s National Center for Charitable Statistics and the United Way Worldwide – produced a whitepaper that called for organizations to make maintaining an adequate level of operating reserves their top priority.
The toolkit was developed with assistance from National Arts Strategies to help nonprofit organizations identify factors to help determine the appropriate size of the reserve, suggest practices for managing the reserve and report its balance. It also includes sample policies, a glossary of terms and other helpful tools.