Guidance

Charity reserves: building resilience (CC19)

Find out what charity reserves are and how to develop and report on a charity's reserves policy.

• From: The Charity Commission
• Published: 29 January 2016
• Last updated: 14 June 2023 — See all updates

Applies to England and Wales

• Publication for Northern Ireland
• Publication for Scotland

Documents

Charity reserves: building resilience

Ref: CC19

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Details

Reserves - the funds a charity keeps in reserve - can strengthen a charity’s resilience against, for example, drops in income or the demands of a new project.

It is important for charities to have a policy explaining their approach to reserves. There is no single level or even a range of reserves that is right for all charities. Any target set by trustees for the level of reserves to be held, or decision that there is no need for reserves, should reflect the particular circumstances of the individual charity and be explained in the policy.

This guidance explains:

• what reserves are
• the importance of having a reserves policy
• how to develop a reserves policy
• the legal requirements for publishing the policy and reporting on it
• what trustees should do to keep proper oversight of their charity’s reserves

Annexes 1 and 2 give practical guidance on creating a reserves policy for small and large charities.

Published 29 January 2016
Last updated 14 June 2023 + show all updates

1. 14 June 2023

   Guidance updated to reflect changes introduced by the Charities Act 2022.

2. 29 January 2016

   First published.