The Boaters’ Christian Fellowship
Reserves Policy
Background
The Charities Commission has issued Guidance CC19, Building Resilience that advise all Charities to set a level of reserves that are commensurate with their operations and expenditure requirements with regard to variations in Income.
Within the Guidance is the following “Key Message to Trustees”:
As the regulator of charities in England and Wales, the commission expects trustees to decide, publish, implement and monitor their charity’s reserves policy so that they can comply with their legal duties to:
- act in the interests of their charity and its beneficiaries
- protect and safeguard the assets of their charity
- act with reasonable care and skill
- ensure their charity is accountable.
In practice, this means that trustees should develop a reserves policy that:
- fully justifies and clearly explains keeping or not keeping reserves
- identifies and plans for the maintenance of essential services for beneficiaries
- reflects the risks of unplanned closure associated with the charity’s business model, spending, commitments, potential liabilities and financial forecasts
- helps to address the risks of unplanned closure on their beneficiaries (in particular, vulnerable beneficiaries), staff and volunteers
- publish the reserves policy (even if not required to by law) and ensure it is tailored to the charity’s circumstances – it should not be just a standard form of wording. It should explain to funders, beneficiaries, the public and the commission exactly what reserves are kept (or not kept) for and when they are to be used (Larger charities are required to publish their assessment of the risks that the charity faces and how to manage them in their annual report.)
- make sure that their reserves policy is put in place and operated
- regularly monitor and review the effectiveness of the policy in the light of the changing funding and financial climate and other risks.
Income and Expenditure Pattern
The Trustees recognise that it is prudent to keep reserves so that all commitments of the Charity are met in a timely and responsible way.
The Trustees have considered the Income and Expenditure pattern of the Charity over the recent years and have concluded that the majority of our expenditure is spread across the year whereas income is predominantly received at the start of the financial period when subscriptions are received.
Necessary Reserves
The Trustees conclude that it is necessary to keep in reserve enough money to meet 33% of the annual expenditure of the Charity.
Reporting
Treasurer is to report on the previous year’s expenditure to the Annual General Meeting.
The level of unrestricted Reserves is to be set at a balance 33% of the amount of expenditure of the previous accounting year.
The Policy is to be reviewed at the first Trustees meeting of the year.
BCF Reserves Policy 2025