Charity reserves policy template

How to use this: complete each section with your own figures and reasoning, then have trustees discuss, agree and adopt it. The target is the board’s decision, based on your risks — not a number from a template.

The Charity Commission expects trustees to set a reasoned reserves policy suited to their charity, rather than a fixed figure (Source: Charity Commission CC19, “Charity reserves: building resilience”, accessed 10 July 2026).

Reserves policy — [Charity name]

1. Why we hold reserves
   [Why reserves matter for us: income gaps, commitments, specific risks.]

2. Our reasoning
   Annual running costs: £[ ]. Main financial risks: [e.g. reliance on one
   funder]. Commitments we must meet: [e.g. staff notice, lease].

3. Our target level of free reserves
   Target range: [months / £] of free (unrestricted) reserves.
   [TRUSTEES TO DECIDE and record the reasoning.]
   Current free reserves: £[ ] — [within / above / below] range.

4. Review and action
   We review this policy [annually / date]. If reserves fall below the range,
   trustees will [plan to rebuild]. If they rise well above it, trustees will
   [consider investing in the charity's work].

Adopted by trustees on: [date]. Next review: [date].