hm, wouldn't that be more a question that would suit more the board? It
seems a rather strategic one.
Lodewijk
2010/3/4 Geoffrey Plourde <geo.plrd(a)yahoo.com>
Veronique, what would be the maximum we'd want to
go with a reserve fund. I
know that with Army Emergency Relief for example, they get dinged by Charity
Navigator for having massive reserves of money. What do you think the
maximum would be for Wikimedia?
________________________________
From: Veronique Kessler <vkessler(a)wikimedia.org>
To: Wikimedia Foundation Mailing List <foundation-l(a)lists.wikimedia.org>
Cc: effeietsanders(a)gmail.com
Sent: Wed, March 3, 2010 6:41:36 PM
Subject: Re: [Foundation-l] Building up the reserves
Hi,
The question of what is the right reserve amount is a common one. I've
hear of ranges from 0 to 3 months to 3 years. I agree that one year is
a good measure and that could be increased or decreased depending on a
variety of circumstances both internal and external. Many non-profits
may have a smaller than optimal reserve because they simply don't have
more funds to keep in a reserve. We are quite fortunate to have the
amount of reserves that we do. As we have operated over the last few
years with a single main fundraiser, our revenue tends to peak over a 4
month period while we have expenses all year. Right after a fundraiser,
we have more reserves than we do right before the fundraiser begins
because we have months of the year where there is little revenue but
expenses are about the same.
Veronique
Andrew Gray wrote:
On 3 March 2010 13:35, effe iets anders
<effeietsanders(a)gmail.com>
wrote:
I assume you do realize that this 12.5M is
/after/ the fundraiser, hence
including the huge amount of donations that has been raised?
...as, indeed, was last December's glut.
Looking at both mid-year and end-year reports, the cashflow status
becomes clearer:
Assets (cash) versus monthly running costs (estimated)
mid-2007 - - - - - $1m
end-2007 - - - - - $2.3m - - - - - $0.21m - - - - - 11 mos.
mid-2008 - - - - - $3m - - - - - ($0.32m) - - - - - 9 mos.
end-2008 - - - - - $6.7m - - - - - $0.43m - - - - - 15 mos.
mid-2009 - - - - - $6.2m - - - - - ($0.54m) - - - - - 11 mos.
end-2009 - - - - - $12.5m - - - - - $0.65m - - - - - 19 mos.
Reserves jump dramatically each year-end report, but then idle until
the next fundraiser - as running costs increase roughly linearly,
though, the average number of months funding in reserve seesaws.
I don't know what's considered a normal margin to have - I'd presume
around a year or so is considered quite good - but hopefully someone
more au fait with standard practice in the field could enlighten us.
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