Reserves policy guidance

19 Jan 2021 Denise Copeland    Last updated: 25 Jan 2021

A reserves policy helps trustees to justify holding appropriate levels of financial reserves to protect against future uncertainties. It is something which various stakeholders may be interested in viewing from time to time.

The Charity Commission for Northern Ireland has produced guidance on reserves which is essential reading for anyone who is developing a reserves policy for the first time or indeed reviewing their current policy. 

The Commission’s guidance explains the difference in restricted and unrestricted funds which is an important starting point in understanding how you determine what may be included in reserves. 

The guidance answers the following questions:

  • Why does a charity need reserves?
  • Why have a reserves policy?
  • What level of reserves is appropriate for my charity?
  • How will we build up these reserves?
  • How will the reserves be monitored and reviewed?

It also covers investments and reserves and how to report on reserves in the trustees’ annual report.  In the appendix of the guidance it details how to write the reserves policy including the key headings that should be included. The guidance can be found at this link 'developing a reserves policy'

Please also see our webinar recording (half hour) on creating/reviewing your reserves policy  Creating/reviewing your reserves policy webinar recording | NICVA's picture
by Denise Copeland

Governance and Charity Advice Manager

[email protected]