Nonprofit Accounting Basics

About the Nonprofit Operating Reserves Initiative (NORI)


In the spring of 2008, a Nonprofit Operating Reserves Initiative Workgroup comprising experienced individuals representing multiple facets of the nonprofit sector was convened to address the need for maintaining operating reserves at levels adequate for achieving financial stability. The Workgroup established two objectives: defining an "Operating Reserves Ratio" and using the ratio to establish benchmarks for financial stability to help nonprofit leaders.


By September, 2008, the Workgroup had reached consensus on definitions for operating reserves and the "Operating Reserves Ratio," specifying that "there is no one size fits all ratio or benchmark" but rather that "it depends," recommending that nonprofit boards establish a Reserve Policy that includes a suggested minimum Operating Reserve Ratio appropriate for their organization. A board approved Reserve Policy could also include board-designated funds that are set aside for non-operating strategic purposes and/ or quasi endowment.

The Webcast: Representatives of the Workgroup made a presentation at the National Grants Partnership Webcast on November 17, 2008 on the "Nonprofit Operating Reserves Initiative."

The Whitepaper: By December 2008, the Nonprofit Operating Reserves Initiative Workgroup drafted and published the whitepaper: "Maintaining Nonprofit Operating Reserves."

The Toolkit: After the whitepaper was released, the group decided that the next step should be to provide a practical way for groups to turn theory into practice. A subset of the workgroup began to assemble the "Operating Reserve Policy Toolkit for Nonprofit Organizations," which was released in September 2010.

Getting the Word Out: Since 2010, members of the workgroup and other interested practitioners have written numerous articles and made many live and webinar presentations promoting the idea of creating and maintaining operating reserves.

Who We Are

Following are links to the list of individuals and entities that support the initiative and have contributed in some way to its formulation and products.