2. Why you should have a reserves policy

A good reserves policy can help you show donors, funders and beneficiaries how you, as charity trustees, are managing the charity’s money. It also shows how you make sure that the charity continues to be financially sustainable.

A reserves policy will help explain to donors and funders why you are holding a particular level of reserves and may help donors and funders to see where funding gaps are and how they can help you meet your funding requirements. 

Having a reserves policy is part of the internal financial management of the charity and will help you to manage your resources better and plan ahead for your needs.