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The Importance of Operating Reserves

“What is an operating reserve, and why does every nonprofit need to address this issue?” In this issue of Accounting and Audit Advisor, Gelman, Roseberg & Freedman’s Amy Boland provides advice on the importance of nonprofit operating reserves as well as how nonprofit boards can determine the most appropriate size of reserves for their organizations.

Included in this article is a comparison between operating reserves and other unrestricted funds, the factors nonprofit boards and executives should consider when making decisions about their operating reserves, and the effects operating reserve levels can have on fundraising capabilities.


The National Association of Public Hospital & Health Systems has been a client of Gelman, Rosenberg & Freedman for many years because of the personalized service we receive from Audit Partner Terri McKnight.

Rhonda Gold |  Assistant Vice President for Financial Operations
National Association of Public Hospital and Health Systems