Center for Association Resources

The Center for Association Resources supports mission-oriented organizations, assisting them in increasing relevance and accomplishing goals.

Establishing a reserve fund

Another in a series of articles related to association management selected from our reading list by:
Robert O. Patterson, JD
CEO/ Principal
The Center for Association Resources, Inc.

In today’s economy, the giving of funds to nonprofit organizations is way down.  Those persons and businesses who used to give a lot are now giving less, and the persons and businesses who gave a little are not giving at all.  With that said, it is highly crucial for nonprofits to establish and maintain a reserve fund in order for them to survive.

Nonprofit organizations have to re-work their budgets and make some extremely difficult decisions in order to keep their causes going.  Organizations have taken extreme measures such as cutting their workforce and moving to more affordable locations, and, in some cases, the organization has even shut down.  However, there are some organizations, both in large cities and even small towns that continue to thrive.  How do some nonprofits thrive while others do not?  There are some key strategies that these organizations utilize to attain their long-term success.

First of all, they develop all the “social capital” that they possibly can.  They accomplish this by spending a lot of time on the phone with potential donors, and also by visiting them or having coffee or lunch with them.  The nonprofits develop close relationships with these persons and businesses so that they will attend fundraisers and donate funds or items to their causes.  These funds are seriously needed to add to the reserve funds of the organizations in order to keep the nonprofits alive.

A successful nonprofit, which has attained a lot of reserves, is sincere.  They care not only about their donors’ passions but their situations, as well.  Sincerity is extremely attractive and will attract a large amount of donors to the organization.  If a donor’s passions and a nonprofit’s passions are similar, there is significant potential for long-term funding to help with the nonprofit’s reserves.

Enthusiasm is a tremendous factor in the overall success of nonprofit organizations.  Without enthusiasm, a nonprofit will accomplish far less than their desired goal.  The nonprofit must have a strong desire for the success of their organization.

Finally, it is crucial for the nonprofit to create and maintain a strict, annual budget.  This will help them manage the organization throughout the year, and also help them see how much funding they need to keep them afloat.  It is possible for any nonprofit to establish a solid reserve fund that will help their group become successful by following the examples of organizations that have become successful, themselves.