Rainy days – Viewing operating reserves in the current economy
Abstract: A lot of nonprofits are seeing less revenue coming in coupled with greater demand for their services. As a result, they’re struggling to cover expenses and are dipping into their operating reserves. But before a nonprofit taps further into its nest egg, it should consider the purpose, nature and limits of these unrestricted funds. Different organizations will need different amounts of reserves, but everyone should have a “Plan B” that identifies additional cuts that can allow quick action if the current downturn lasts longer than anticipated.