Lori, I am sure the local government also maintains a cash reserve, as
recommended by most auditing firms.  You are confronted with a local issue
and perhaps you could find out from the administrator what percent of the
local budget is maintained as a reserve. That might be a target for your
institution.

In far too many cases, small museums are unable to put together an ongoing
cash reserve.  We can operate for about three months with our invested cash
flow -- unless an emergency arises.  I would much prefer having a year's
budget set aside.
Ross Weeks Jr.
Tazewell VA

----- Original Message -----
From: "Richard de Koster" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Tuesday, April 17, 2001 10:04 PM
Subject: Re: Cash Reserves


> Dear Lori,
>     I think your question is something we should all think about.  Our
> museum keeps about a year's worth of operating expenses in money market,
> bond & stock funds, etc.  We try never to touch it.  But, for example,
last
> year it made it possible to upgrade our technology base.  I've never heard
> of a small museum having too much cash reserves.  Your County Government
> should see those reserves as a sign of a well run institution that will
make
> careful use of the grants you are applying for.  Have trustees (does your
> museum have an attorney?) personally contact the concerned officials.  Try
> to have a respected and relatively uninvolved community leader make your
> case for you.  If you spend down your hard won reserves you will not find
> the county coming to your rescue in case of an emergency.
>
> Richard de Koster
> Executive Director
> Constitution Island Association
> at West Point
> www.constitutionisland.org
>   -----Original Message-----
>   From: Museum discussion list [mailto:[log in to unmask]]On
> Behalf Of Lori Tomlinson
>   Sent: Tuesday, April 17, 2001 9:23 PM
>   To: [log in to unmask]
>   Subject: Cash Reserves
>
>
>   Hi listers!
>
>   We are a small history museum in Florida.  Annually, we apply for grant
> funds
>   from our County Government.  This year, they have questioned the amount
of
>   cash shown on our Balance Sheet.  Our board and staff feel strongly that
>   having a certain amount of cash reserves is not only wise, but
necessary,
> in
>   the event of major (or minor) emergencies (i.e. our annual major
> fundraiser,
>   and outdoor historical festival, is rained out; natural disaster
strikes;
>   etc.).
>
>   Is there a standard in the museum industry for how much cash should
> ideally
>   be held in reserve?   Perhaps a certain percentage of the institution's
>   annual operating budget?  I am curious as to how much other museums hold
> in
>   reserve (where possible).  Please reply to the e-mail address given
below.
>
>   Thanks in advance!
>
>   Lori Tomlinson
>   Executive Director
>   Florida Adventure Museum
>   Punta Gorda, Florida
>   [log in to unmask]
>
>

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