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
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