After my email last week about budgets, a fellow grant writer replied, asking my thoughts about reserves. It is commonly thought that having “too much” money in reserves can hurt an organization’s chances of receiving grant money.
I believe the opposite is true…
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It is a common concern that if an organizational budget shows an excess amount of money, grant funders will think they don’t need the grant funding.
Reserves are necessary and support sustainability, and I believe that grant funders favor seeing reserves.
I also take the time to explain the reserves in a budget narrative.
For example, one of my clients is in Florida. Over the past 5 years, they have been hit with hurricane after hurricane. It has resulted in canceled fundraisers, office closures, and the need for more resources to distribute to the community.
Following one of the hurricanes, the Board met and agreed to hold 12 full months in reserves to guarantee the organization’s survival following a natural disaster or any other unforeseen challenge.
I drafted an explanation for this decision, which I include in the budget narrative of every grant I submit.
The feedback has been favorable. Grant funders have told me that 12 months of reserves is a sign of a sustainable and fiscally responsible organization, and they feel comfortable investing their grant funds.
Don’t be afraid of a budget that shows considerable reserves. Add an explanation and submit with confidence.
Until next time,
Write Epic Grants
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