An interesting question, Lori. I have never had to worry too much about cash reserves for the museums I worked in but I do for a small national foundation of which I am treasurer. I keep in cash enough money for our annual operations plus an amount equal to what I expect to receive in donations of $500 or less. Any surpluses are transferred to our scholarship trust fund, where they are invested 65% in fixed income securities and up to 35% in mutual funds. I have never seen much discussion on this topic. I think you will have to work out a formula with your board, as we did. Harry Needham Consulting Services Inc. Consulting, training & research solutions for heritage institutions - and others! 74 Abbeyhill Drive Kanata ON K2L 1H1 Canada (voice) +1.613.831-1068 (fax) +1.613.831-9412 [log in to unmask]