About Safe Haven – A Ray of Hope

Financial Reserves Policy and Procedures

 

1. Purpose of the Policy

This policy sets out the approach of Safe Haven – A Ray of Hope to managing and maintaining financial reserves.

It ensures the charity maintains adequate financial stability and sustainability, while also fulfilling its responsibilities to beneficiaries.

2. Definition of Reserves

Reserves are that part of the charity’s unrestricted funds that are freely available to spend on any of the charity’s purposes.

This excludes restricted funds and tangible fixed assets used in the course of the charity’s operations.

3. Objectives of Holding Reserves
  • To ensure the charity can continue to operate in times of financial difficulty or unforeseen events.
  • To provide funding for unexpected opportunities aligned with the charity’s mission.
  • To allow time to adjust operations in response to reduced income or increased costs.
4. Target Level of Reserves

The charity aims to hold unrestricted reserves equivalent to at least 3 to 6 months of its core operating costs.

The target range may be adjusted annually based on risk assessment, funding volatility, and strategic priorities.

5. Calculation of Required Reserves

The level of reserves is calculated based on the average monthly running costs, excluding project-specific and restricted fund activities.

The calculation is reviewed and approved annually by the Board of Trustees as part of the budget-setting process.

6. Use of Reserves

Use of reserves must be authorised by the Board of Trustees.

Funds may be used in the event of income shortfall, urgent repairs, or exceptional circumstances affecting operational continuity.

A plan for replenishing reserves should accompany any significant drawdown.

7. Monitoring and Reporting
  • Reserves will be monitored and reported to the Board of Trustees on a quarterly basis.
  • The financial statements will disclose the amount of reserves held and how they relate to the reserves policy.
8. Responsibilities
  • The Treasurer is responsible for calculating and proposing the required reserves level.
  • The Board of Trustees is responsible for approving, reviewing, and ensuring compliance with this policy.
9. Review of the Policy

This policy will be reviewed annually or when there is a significant change in the charity’s activities, income, or risk profile.

 

Approved by:

Blessing Olalemi: May 30th

Kerry- Ann Batten: May 29

John Olalemi: May 30th

 

Last reviewed: May 30th 2025 | Next review: June 2026