A number of years ago,an article in Third Sector Finance published a report commissioned by the Charity Finance Group and others indicating that from their survey, most charities would be unable to add to their reserves. I would not be surprised if the same survey, published today would not say exactly the same thing. It made me ask another question which I would still ask today; are they really unable or is the truth that they are not prepared to make some hard choices?

Let's face facts. Without reserves, a charity will at best live hand to mouth and at worst fail; Kids Company being the most high profile example. At a time when funding is tight, if a charity is to continue to deliver for it's beneficiaries, it may mean that in the short term at least, some projects may need to be put on the back burner temporarily or even permanently. That may mean also that the charity needs to consider downsizing. However, there may be other solutions which are more acceptable to achieve your goals. You may consider a collaborative approach, anything from a joint venture to a full merger. Big is not necessarily bad if your charitable goals are to be achieved but the downsides need to be managed and there can be downsides.

However, one thing is for certain; without reserves there will be no future and the problem will not go away so don't be afraid of making a surplus and retaining it. Show why you are doing it and what you can and are achieving by increasing your reserves.Even in the most difficult times solutions can be found so if you recognise your charity as having reached this crossroad, why not give ne a call for a no obligation chat on 07896 894711 or email This email address is being protected from spambots. You need JavaScript enabled to view it.