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Charities & not-for-profit

Improving financial health with reserves planning

Reserve funds offer charities and not-for-profit organizations important benefits— from funding new strategic directions to avoiding undesirable cost reduction measures—but setting them up is not without its challenges. What types of reserves are appropriate for your organization—and how should you calculate your reserve levels? Who is responsible for approving a reserves policy and how can you ensure your reserves are within the parameters set by the Canada Revenue Agency (CRA)?

Because no two organizations’ operations and risk profiles are alike, the answers to these questions vary. Just as all organizations establish their own unique operating plans and budgets, we recommend that every charity and not-for-profit organization adopt a unique reserves plan to meet its specific needs and circumstances. The purpose of this paper is to help you identify those needs and the reserves policy that makes the most sense for your organization.

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Reserves planning for charities and not-for-profits

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