Washington-Area Nonprofit Operating Reserves

Washington-Area Nonprofit Operating Reserves

Abstract

This report, funded by the Meyer Foundation, looks at the operating reservesthe cash and other liquid assetsof public charities in the Washington Metropolitan area. Using IRS Form 990 data, the report found that 57 percent had reserves insufficient to cover three months of expenses, a level that many experts consider the minimum necessary for financial stability. This leaves them especially vulnerable to the rapid declines in revenue or increases in expenses that occur in economic downturns like the present. A substantial perecentage of all types and sizes of organizations lacked adequate reserves.

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