- July 14, 2010
- Frank L. Kurre, National Managing Partner, Not-for-Profit Practice, Grant Thornton LLP
- Member: FREE
For not-for-profit organizations--indeed, for all organizations--maintaining adequate reserves is essential to establishing financial stability. Maintaining insufficient reserves can put an organization at risk, but maintaining excessive reserves can also be problematic. A number of organizations have been criticized for retaining excessive reserves. So what level of reserves should not-for-profit organizations maintain within their net asset balances? This is an age-old question asked by many not-for-profit organizations and their various constituencies. This paper offers some practical guidance to organizations that wrestle with this issue.