Setting up and running a charity – guidance

Charities and reserves (CC19)

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