Guidance on organisational reserves

NICVA

Free

Online Resource

reserves_policy.doc

The guidance was drawn up by the Department of Finance and Personnel following consultation with departments and the voluntary and community sector and as such it is of relevance to voluntary and community organisations, statutory bodies and funders generally. The steering group hope that the guidance adequately represents what the public and a funder might expect to see in a well governed organisation.

Background to the guidance on reserves

Community Change, NICVA and the Volunteer Development Agency have been part of a steering group on best practice in finance and governance along with the Department of Health, Social Services and Public Safety, the Department for Finance and Personnel and the Department for Social Development. The steering group have been working on developing guidance on organisational reserves in voluntary and community organisations.

We asked for comments from the sector over the summer on the draft guidance, the comments that we received were considered and a final draft has been completed.

What is the purpose of the guidance?

The purpose of the guidance is to provide voluntary and community organisations with best practice advice in respect of reserves. The guidance highlights the importance of having an agreed reserves policy which justifies holding appropriate levels of financial reserves to protect against future uncertainties and allow organisations to take advantage of change and opportunity. We also hope that the guidance will ensure that no voluntary or community organisation is penalised by funders for holding appropriate financial reserves.

Much of the detail in this document comes from guidance from the Charity Commission for England and Wales and may in the future be affected by the outworking of the new Charities legislation in Northern Ireland.

Is the guidance legally binding?

Although the guidance is expected to be applicable to all organisations in the voluntary and community sector in Northern Ireland, in itself it has no legal authority.