“Reserves” refer to the amount of money that Woolly Hugs holds unspent as a buffer against those “rainy days” where, for a variety of reasons, most likely to be economic climate, but not exclusively, we find that payments are outstripping receipts in a way that, without reserves, the charity wouldn’t be unable to function. We see it as a contingency fund against the unexpected.
Woolly Hugs owns no property, nor employs staff. Our resources (primarily for events/Hugathons) are insured, but this contingency fund would protect us short term to continue our provision if something were to happen.
The trustees have set a level equivalent to 18 months of operating costs for the organisation as a desired level of reserve.
The levels of reserves required are reviewed yearly.