Good Afternoon Carol,
I have seen:
1.)  City governments with a 5% reserve in the operational budget....and
on the other end......
2.)  Non-Profit Homeowner's Associations with a 100% reserve in the
operational budget.
I would recommend a operational budget reserve fund that would be equal
to an average month's operational expenditures.  This operational budget
reserve fund should not be confused with, or mixed-up with a Capital
Improvements Fund or a Building Maintenance Fund.  Also, if the museum
has large amounts of cash in the bank, the organization would be better
served with those funds being used to establishing an endowment,
attracting additional funds and earning money that would be dedicated to
supporting that organization.
My 2 cents.....
Best Wishes for Success,
Wesley

Wesley S. Creel
Administrator of Programs
Pink Palace Family of Museums
3050 Central Avenue
Memphis, TN 38111
U.S.A.
www.memphismuseums.org
Office telephone 901.320.6370
 

 
-----Original Message-----
From: Museum discussion list [mailto:[log in to unmask]] On
Behalf Of Carol Ely
Sent: Tuesday, June 28, 2005 10:53 AM
To: [log in to unmask]
Subject: Re: operating reserve

>>>>You need to check on what the rules are for carryover of funds with 
your parent agency. If it's a government agency (county, city, 
state), there may not be a way to carry funds forward.>>>

I should have made it clear in the original question - we have no parent
agency, we're an independent non-profit. You suggest 5-10% of a year's
budget - my board is suggesting a 50-100% reserve. 

So, what's the norm, and is there a limit? Anyone else?

Carol Ely
Historic Locust Grove
Louisville

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