What Happens on a Rainy Day? How Nonprofit Human Service Leaders Create, Maintain, and Utilize Operating Reserves

Authors

  • Margaret F. Sloan James Madison University
  • Cleopatra Grizzle Rutgers University – Newark
  • Mirae Kim University of Missouri – Columbia

Keywords:

operating reserves, nonprofit managemen, rainy day funds, nonprofit finance

Abstract

Through a series of 30 executive interviews, we examined the creation, utilization, and maintenance of operating reserves in human service organizations. In our analysis, we identified organizational leadership experience and primary sources of revenue as related to the presence of a reserve. In addition, formal policy regarding how funds are used is minimal, with organizations ranging widely in their rationale for accessing the reserve. This article contributes to nonprofit management research by identifying practices for reserves and promotes academic understanding of how organizations interpret reserves in their day-to-day operations.

Published

2015-06-29

Issue

Section

Articles