Find out what charity reserves are and how to develop and report on a charity's reserves policy.
Guidance for charity trustees on reserves.
Keeping money aside as a reserve can protect your charity against drops in income or allow it to take advantage of new opportunities. But trustees must be able to justify holding a level of reserves.
By law, charities must spend their income within a reasonable period of time unless there’s a good reason not to.
A reserves policy explains to existing and potential funders, donors and other interested parties why a charity is holding a particular amount of reserves.
This guidance shows trustees how to:
- decide if their charity needs reserves
- develop a policy on reserves
- explain their reserves policy in the trustees’ annual report