Reply To: Managing and using cash reserves


    Our organization included fundraising for cash reserves as part of our 5-year strategic plan.  We were able to fundraise 3 months of cash reserves as a permanently restricted asset.  These funds function as our internal Line of Credit as we spend the most during the first half of the fiscal year, and during 2nd half is when our receivables are paid along with our significant gala income.  During this 2nd half, we repay our internal LOC.  This relieves us during the heavy cash outflow months and helps us plan a balanced budget with timing variances.

    We also received a large windfall of monies, in which we created an investment committee to review how much to allocate to the endowment and for future programming.  It took us about a year to fully plan out the allocations and hire the right investment manager—leveraging the financial institution to be more than just a business relationship but also bringing them in as program sponsors.

    We were transparent with our full staff about how the organization will be using the money and at the same time listened to new ideas that can be included in our strategic plan.

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