Purpose
The Reserves Policy aims to ensure that Coast Medic maintains an appropriate level of financial reserves to support the charity’s activities and safeguard its sustainability. The policy provides a framework for determining, monitoring, and managing reserves to meet unforeseen circumstances, operational needs, and future opportunities.
Scope
This policy applies to all unrestricted funds held by Coast Medic, including:
- General reserves
- Designated reserves
Restricted funds, which must be used for specific purposes, are excluded from this policy.
Definition of Reserves
Reserves are the portion of Coast Medic’s unrestricted funds that are freely available to be used for any of the charity’s purposes. They exclude:
- Fixed assets used for charitable purposes
- Restricted or endowment funds
- Funds already committed or designated for specific future purposes
Reserve Levels
Target Reserve Level
Coast Medic aims to maintain reserves equivalent to 6 months of core operating costs, ensuring the charity can continue to operate and fulfil its objectives during periods of:
- Unexpected funding shortfalls
- Emergencies or unforeseen expenses
- Transitional phases or growth opportunities
Factors Considered in Determining Reserve Levels
The target reserve level will be reviewed annually and will consider:
- Annual operating expenses
- Funding volatility and diversity
- Risks associated with income streams
- Future financial commitments or strategic plans
- External economic factors
Use of Reserves
Reserves will only be used in accordance with the following principles:
- Emergencies: To cover short-term funding gaps or urgent, unforeseen expenses.
- Strategic Investments: To fund opportunities that align with Coast Medic’s objectives and ensure long-term sustainability.
- Approval Process: Any use of reserves must be approved by the Board of Trustees, with a clear plan for replenishing the reserves if necessary.
Monitoring and Reporting
Monitoring
- Reserves will be monitored regularly as part of the charity’s financial management processes.
- The Finance Team will provide monthly updates on reserve levels to the Board of Trustees.
Reporting
- The level and purpose of reserves will be disclosed in Coast Medic’s annual financial statements, in accordance with regulatory requirements and best practices.
- Any significant changes to the reserves position will be explained in the Trustees’ Annual Report.
Review of Policy
This policy will be reviewed annually by the Board of Trustees to ensure it remains relevant and appropriate in light of the charity’s financial position, risks, and objectives. Any changes to the policy will be documented and communicated to relevant stakeholders.
Approval and Implementation
This Reserves Policy was approved by the Board of Trustees on 14/01/2025 and is effective immediately.