Quote:
Originally Posted by Kate Mosley
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not necessarily. It is important to have a cash reserve to give a little room for the unexpected, the unanticipated, and other things they may be in their business plan.
Also a lot of the funding come from other donors with that have deemed it acceptable that they have this cash reserve.
I'd even bet that a lot of well run teams have a small cash reserve for the same reason. covering unexpected bills and sufficient operating funds as you roll over into the next year.
On the same topic - non-profits, high school clubs, etc shouldn't be accumulating stockpiles of cash just for fun. I know of an example of a high school booster organization that had 100K CDs in the bank with no potential use for the money. That was in an organization that had more in CDs than their annual operating budget.
Donors expect their contributions to be used for the program in which they contributed. For something like a high school group that means that academic year. Organizations like FIRST have considerably more leeway and can use the money when it makes the most sense.
But you still need to have a sensible cash reserve and IMHO FIRST has one.