By building and maintaining an operating reserve, an organization has the ability to better manage its cash flows on a day-to-day basis. An operating reserve can be a valuable tool to help a not-for-profit organization respond to temporary changes in circumstances or in its environment.

This template contains a sample policy that can be used for your operating reserve policy.

As with any policy of this nature, you may wish to consult their legal counsel or independent auditor for assistance in developing an operating reserve policy that is appropriate for the organization that has been customized based on the risks, operations and structure of your organization.