[Foundation-l] Building up the reserves

[effe iets anders]

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 op 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 op wikimedia.org>
> To: Wikimedia Foundation Mailing List <foundation-l op lists.wikimedia.org>
> Cc: effeietsanders op 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 op 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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