To CALA Member Groups with Charitable Status


A lot of committees are now organising their Annual General Meetings for handover to new committees. As part of this handover, annual accounts are also being prepared showing the financial picture for the year and addressing all possible liabilities for the future.

For those of you employing staff, we want to remind you of the need to ensure you have a redundancy reserve in place. You can easily work out how much this is by visiting the Government’s redundancy pay calculator. Have your staff member’s date of birth and length of service ready, and the calculator will work out how much you need to consider setting aside.

Charity Reserves Advice for Committee Members

The following information is taken from the UK Government’s guidance on ‘managing charity assets and resources’ and resources‘, and outlines the importance of a charity maintaining a reserve:

A charity should provide reliable and consistent services to its beneficiaries beyond the immediate future. It needs to be able to meet unexpected expenses, absorb setbacks and take advantage of change and opportunities for development when they arise. One way of doing this is to set aside income, when it can afford it, as a reserve.

Reserves are part of a charity’s unrestricted funds that is freely available to spend on any of the charity’s purposes.

Charities can be affected by changes in the economic climate. This means that many charities will at some point face financial uncertainty therefore robust procedures need to be in place for the planning, management and review of its finances, e.g. redundancy reserve for staff.

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