Reserves Policy

It is the policy of the Foundation to increase unrestricted funds to the level required to provide sufficient funds to cover administration costs. The Trustees are committed to ensuring a minimum surplus of 3 months operating costs.

The Foundation will aspire to have 6 months operating costs as a surplus.

The trustees’ monitoring of reserves will happen at each Trustees Meeting. The Trustees acknowledge that how the level of reserves changes during the year can be a good indicator of the underlying financial health of the charity and can be an indicator of potential problems. The level of reserves will be monitored throughout the year as part of the normal monitoring and budgetary reporting processes.

Trustees will:
identify when reserves are drawn on so that they understand the reasons and can consider the corrective action, if any, that needs to be taken;
identify when reserve levels rise significantly above target so that they understand the reasons and can consider the corrective action, if any, that needs to be taken;
identify where the reserves level is below target, consider whether this is due to short-term circumstance or longer-term reasons which might trigger a broader review of finances and reserves;
regard the ongoing review of the reserves level, target and policy as part of managing the charity;
Review the statement on reserves in the Trustees’ Annual Report where there have been significant changes in the reserves policy or level of reserves held.
ensure that the reserves policy continues to be relevant as the charity develops or changes its strategy and activities;

The Reserves Policy will be reviewed every 3 years as a minimum. In addition, more frequent reviews will be undertaken following a change in relevant legislation; following the implementation of a new activity or service which poses new and previously unidentified risks; following an event that has had an adverse effect on the Foundation’s ability to meet its business objectives and execute its strategies successfully.

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