Lesson 1: Shared Resource

Title: About Those Nonprofit Reserves: How Much Do You Need, Again?

Link: https://nonprofitquarterly.org/2017/06/01/nonprofit-reserves-much-need/

I chose this article to share with the class as a valuable resource because I believe it corresponds to our discussion during last night’s class as to non-profits actually making a “profit,” or a surplus of money as we should call it. Non-profits are encouraged to have a reserve fund for those “rainy day situations.” A non-profit organization uses its surplus revenues to further achieve its mission (purpose for the organization), rather than distributing its surplus (revenue) to the organization’s shareholders as profits or dividends. A reserve fund is essentially for cash flow emergencies that cannot be solved through funding. This article touches on the fact of too much “profit” for a non-profit organization and how much funding an organization should receive to plan accordingly. These reserve funds can get organizations in trouble if not used towards the mission or are misunderstood to be too much or too little. Interesting short read!