1. Purpose:

The purpose of this Reserves Policy is to establish guidelines for the maintenance and use of reserve funds to ensure the financial stability and sustainability of the organization.

2. Definition of Reserves:

Reserves are funds set aside to address unforeseen financial needs, economic downturns, emergencies, or opportunities that align with the organization's mission.

3. Objective:

The primary objective of the reserves is to provide financial flexibility and stability while allowing the organization to fulfill its mission and strategic goals.

4. Reserve Levels:

The organization shall maintain a target level of reserves determined by the Board of Directors. The target level shall be expressed as a percentage of the annual operating budget. The specific target level shall be reviewed and adjusted as needed to align with the organization's financial goals and risk tolerance.

5. Funding Reserves:

Reserves shall be funded through surplus revenues, investment income, unrestricted donations, or other sources of unrestricted funds.

6. Use of Reserves:

Reserves may be used for the following purposes:

Covering unexpected operational expenses or revenue shortfalls.

Seizing strategic opportunities aligned with the organization's mission.

Addressing emergencies or crises that impact the organization's ability to operate effectively.

Facilitating planned, large-scale projects or initiatives.

7. Reserve Management:

The Board of Directors shall be responsible for approving the use of reserves for the purposes listed in section 6.

The organization's financial team shall periodically assess the adequacy of reserves and recommend adjustments to the Board if necessary.

Reserves shall be invested in accordance with the Investment Policy, with a focus on preserving principal and generating income.

8. Reporting:

The organization shall provide regular reports to the Board of Directors regarding the status of reserves, including balances, usage, and any proposed allocations or adjustments.

9. Replenishing Reserves:

After a reserve is utilized, efforts shall be made to replenish the reserves to the target level as soon as practical. The specific allocation of surplus funds or contributions to replenish reserves shall be determined by the Board.

10. Review and Amendment:

- This Reserves Policy shall be reviewed periodically, at least annually, to ensure it remains aligned with the organization's financial goals and needs. Amendments may be proposed and approved by the Board of Directors.

11. Approval:

- This Reserves Policy shall be approved by the Board of Directors and shall be made available to all members, stakeholders, and relevant parties.

This Reserves Policy provides a framework for the establishment, management, and utilization of reserves to safeguard the financial stability of the organization. It emphasizes the importance of maintaining a target reserve level, transparent reporting, and responsible decision-making when accessing reserves for specific purposes.