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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