50% of nonprofits have less than one month of operating reserves. Operating reserves are key to a nonprofit's financial health. Reserves provide organizations with the financial capacity to withstand negative events, self fund large capital expenditures, take advantage of strategic opportunities and to invest in the future.

Recognize that financial health is critical to an organization's ability to fulfill its mission
Select indicators to measure financial health
Identify the appropriate level of reserves for your organization
Use policies and procedures to communicate the importance of operating reserves to key stakeholders

Shawn Van Gorder

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