Reserve Policy Template.

Give the board a short policy to adopt that protects the reserve: what it is for, when it may be drawn, who approves a draw, and how it gets rebuilt. A reserve with no policy is spent the first tight month and never returns.

In Build Financial Resilience and Reserves, after the target is set. Adopting it is a board act.

The policy

Purpose: what this reserve exists to do, carry the organization through a genuine shock, not to fund ordinary operations

Target: the reserve goal, in months of operating costs and dollars, from your Reserve Target Calculator

What counts: only truly unrestricted money is in the reserve. Restricted funds are never counted or used

When it may be drawn: the specific conditions that justify a draw, a real shock, not a routine bad month

Who approves a draw: the board, or a named board body, must approve, and it is recorded

How it gets rebuilt: the organization commits to restoring the reserve after any draw, on a stated timeline

Where it is held: an account where it is not casually spent

Adopt it

The board reviews and adopts the policy by formal vote, recorded in the minutes.

Why the board, not staff: a reserve policy is the board committing to protect the organization's cushion, a commitment staff cannot make alone. It makes drawing on the cushion a deliberate, recorded, board decision, and it commits the organization to putting the money back.

Built from the Reserve Target Calculator. Precedes the Reserve Building Plan.

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