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Reserves

By Alan Hough | 8 June 2020

Reserves tend to come in two forms:

 

  • Money placed on one side to cover ongoing costs in the event of a loss of income or an increase in running expenses

 

  • Money set aside for a specific future project or to safeguard an organisation against anticipated but unknown future events

 

COVID-19 falls very much into that second category and at times such as these organisations may need to dip into its reserves, being prepared to go below the level of reserves that they would normally hold, and below the level stated in the reserves policy. The Charity Commission is clear when it says “reserves can be spent to help cope with unexpected events like those unfolding at present”.

We have updated our briefing paper How to think about reserves in light of COVID-19 which explores in more depth both the biblical and practical considerations when thinking about the level of reserves that might be right to hold.


Read more...

How to think about reserves

Posted by Alan Hough

Alan has an accounting background having worked in “the City” for more years than he cares to mention. He now works as an advisor and consultant to a number of Christian churches and charities seeking to help them better understand and embrace their finances.

On a good day, you might find him on out on his bike or at White Hart Lane cheering on his beloved Spurs.

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