Special funds

Once adequate working capital and operating reserves are in place, along with any necessary equipment/building maintenance/replacement funds, your organization may want to consider establishing funds to support special program activities and strategic initiatives.

Emergency Program Services
For organizations that serve clients affected by natural disasters or other calamities such as fires or major transportation crashes, special emergency reserves may be appropriate. United Way Worldwide, admittedly a very large organization, has published guidelines for its member organizations to follow when setting targets for building such reserves to enable them to serve their clients.

Strategic Initiatives
Many well written strategic plans sit on the shelf for lack of resources to implement identified initiatives. Don't let this happen to you. Research the probable financial impact of strategic initiatives, including the need for additional human resources. Determine the timing, and availability of funding, for initiatives and design a fundraising strategy to complement the existing fundraising plan for operations.

Opportunity Funds
With or without a strategic plan in place, sometimes new program opportunities present themselves unexpectedly and may require start-up funding. Having special funds set aside for an artistic director or program manager to access under such circumstances can allow for program growth and quality enhancements that would cost far more if delayed; they could allow an entrepreneurial founder to seize opportunities or act on ideas without putting the organization in financial jeopardy.

Naturally, building the funds to create strategic and opportunity funds takes careful budgeting and disciplined financial management, and policies must be followed in deciding whether and how to access these funds and replenish them as appropriate.