1. Purpose
Ensure the stability and sustainability of BUDS UK's mission, operational emergencies, and ongoing projects.
2. Definitions and Goals
2.1 Operating Reserve
A designated amount of cash or cash equivalents set aside to stabilise BUDS UK's finances by providing a cushion against unexpected events, revenue fluctuations, and unanticipated expenses.
2.2 Reserve Goals
- Minimum Reserve Level: equivalent to 9 months of average operating costs.
- Target Reserve Level: equivalent to twelve months of average operating costs.
3. Use of Reserves
3.1 Authorisation for Use
- The Treasurer may authorise use of reserves up to three months of average operational costs.
- Use exceeding three months requires approval from at least eight members of the board of trustees.
3.2 Conditions for Use
- Reserves used only for temporary shortfalls, unanticipated expenses, or strategic opportunities.
- Use should be accompanied by a plan to replenish funds within typically twelve months.
4. Replenishment of Reserves
- Unrestricted donations
- Budget surpluses
- Fundraising efforts specifically designated for reserves
5. Management of Reserves
- Reserves are held in secure, low-risk investments such as savings accounts.
- Reserve funds are recorded separately from other funds in the financial statements.
- Regular reports on the status of the reserves are provided to the Board of Trustees.
6. Review and Revision
This policy will be reviewed annually by the board of Trustees. Any recommended changes will be presented at the AGM for approval.