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Developing a reserve fund is a crucial part of maintaining your nonprofit’s stability and sustainability. As YPTC’s nonprofit financial management guide explains, “When you’re in survival mode, you might spend every dollar that comes in. To be sustainable, make sure you’re building an operating reserve. This can help provide a safety net during times of uncertainty, economic downturns, or other adverse circumstances.”
However, donors might wonder why or how you’re generating enough funds for a reserve in the first place. They might ask themselves: “Does this organization truly need my contributions if they already have enough extra funds leftover to put in reserve?”
To help you balance building your reserve and retaining donor support, this guide offers tips for advancing your reserve strategy while reinforcing donor confidence.
