Meetings/2009-04-26/Agenda/Reserve Policy
Whereas, the Charity Commission recommends all charities have a Reserve Policy[1].
This Board resolves to adopt the following Reserve Policy:
1) "Reserves" is defined as income which becomes available to the charity and is to be spent at the Board's discretion in furtherance of any of the charity's objects; but which is not yet spent, committed or designated.
2) The charity requires a reserve in order to be able to reliable plan for the future without temporary changes in income having a deleterious effect.
3) The charity has an obligation to spend donations in order to further its objects and not keep hold of them unnecessary.
4) The Board will endeavour to maintain a reserve of at least 50% of the previous financial year's gross revenue, or £1000, whichever is greater.
5) The Board will endeavour to avoid having a reserve of greater than 100% of the previous financial year's gross revenue, or 100% of the current year's gross revenue to date, whichever is greater.
6) The Board will endeavour to spend at least 50% of each year's gross revenue in that year.
7) The Treasurer will advise the Board if any of clauses 4 to 6 is likely to be violated.
8) If any of clauses 4 to 6 is not met at any time, the Treasurer will report this fact to the Board who will determine an action plan to rectify the situation as quickly as possible without harming the charity's objects. The Treasurer will regularly report on the progress of this plan and will advise the Board if it appears the plan is not going to be effective.
9) The Board will review this policy on an annual basis to ensure it is still applicable and amend it if necessary.