The Nonprofit FAQ

Criteria for Nonprofits' Operating Reserves

The article is at http://www.iknow.org/pages/articles/criteria.html See also Nathan Garber's suggestions of things to consider at http://garberconsulting.com/FAQ.htm Kathleen H. Mendez of the Food Bank of Western New York, Inc., in Buffalo, NY, commented on February 11, 2003: I found the suggestion of "Short-term use of government or foundation money until intended program begins (i.e., as an advance) to be a very dangerous one. Too many nonprofits have gotten themselves into real financial trouble and even put themselves out of existence by following this practice. It is our belief that government or foundation money should never be used for any purpose other than the intended (restricted). Sometimes it may work well in the reverse, using the operating reserve funds to cover grant expenditures prior to actual receipt of the cash. Created January 2003 by Raffa & Associates; modified 3/1/03, 2/12/04 - PB