Risk-Based Reserves Case Study

CASE STUDIES

Risk-Based Reserves

Part of our role is to guide Boards to better understand how they should hold reserves. This experience explores how we developed a reserves policy, for a well-known National Charity, that was risk resilient and understood by all trustees.

National charity & membership organisation

6,890

Risk-based reserves policy

2021

Image - Female business women sitting at table discussion paper on table

What happened?

We started working with this organisation, offering a full out-sourced solution. Once settled, we recommended to the Board that their Finance and Scrutiny team develop an approach for sustainable reserves. This would help act as a compass for future discussions on risk v investment and how much reserves the charity hold.

An agreed solution

We presented a phased and clearly accessible document which covered a range of often asked reserves questions, including: the statutory position, the minimum position, our current reserves position (properly split between restricted and unrestricted) and a risk-based position. We prepared actions required, which empowered the Board to agree a journey for reserves for the next strategic plan cycle.

Our impact

With clear illustrations, calculation and insight, Board members were able to develop a risk-based reserves decision to be updated annually. The process added increased confidence during a critical time in 2020, providing evidence to the Board that they were able to make fresh investment in new services for the members and key stakeholders. This in turn has led to renewed growth in outcomes and income for the charity.

What our client valued

The organisation gained the following outcomes from working with Crossley Third Sector: