Practice Element 6A4: Building and Maintaining Operating Reserves

Land Trust Standards and Practices, Practice 6A. Fiscal Health, includes five elements. This module addresses Practice 6A4: Build and maintain sufficient operating reserves to sustain operations.

One size does not fit all when it comes to operating reserves. Despite the importance of the issue, there is no simple formula or benchmark. To answer the question of “how much,” an organization must examine revenue streams and spending levels.

This guidance covers Practice Element 6A5: Build and maintain dedicated or restricted funds sufficient to cover the long term costs of stewarding and defending the land trust’s land and conservation easements.

Land Trust Standards and Practices, Practice 5B: Accountability to Donors, includes four elements. This 30-minute module covers the third element:

3. Maintain financial and other systems to document and comply with any donor restrictions on gifts

Land Trust Standards and Practices, Practice 6A. Fiscal Health, includes five elements. This module addresses Practice 6A5: Build and maintain dedicated or restricted funds sufficient to cover the long-term costs of stewarding and defending the land trust's land and conservation easements.

Revenue generated from activities inconsistent with a nonprofit’s tax-exempt purpose may give rise to tax obligations. This document outlines ways to minimize that risk and outlined the typical sources of taxable income for nonprofits, along with common pitfalls and questions.

This guidance covers Practice Element 6A1: Develop an annual budget that reflects the land trust’s annual programs and activities.

Eventually, every land trust will face some form of legal action and it is very difficult or even impossible to know ahead of time when a land trust will be involved in a legal action (regardless of whether the land trust is initiating or responding to a legal action) so planning ahead is essential.

This guidance covers Practice 6A: Fiscal Health.