RESERVES POLICY FOR CHESTERFIELD PHILHARMONIC CHOIR
Registered Charity No: 500561

(1) Reasons why the Charity may need reserves
There are three reasons for this reserves policy:

to ensure financial continuity in the event of a large variation in income;

to maintain a positive cash flow, particularly before concerts;

to cover specific future projects as they are agreed. Such projects may be high profile, high cost concerts, or other activities the trustees (committee) choose to undertake to raise the profile of the choir.

(2) Level or Range of Reserves
The trustees believe that the Charity should operate a range of reserves:

The bottom level of this range should be £5,000 at the end of any financial year (July). This will ensure sufficient funds are available to meet routine monthly costs before core income such as membership fees is available – usually not until mid-October each year.

A sum greater than £5,000 at the end of the previous financial year may be necessary when an additional project or projects, above four concerts and a choral day are planned. This sum will be determined by the forecast net loss for the project.

A sum greater than £5,000 may be required at the end of the previous financial year when more than one concert with orchestra is planned or budgeted costs for a concert are significantly higher than average. The additional funds should be the expected additional cost of the concert above £3000 (the average cost for a concert without orchestra).

In year reserves immediately prior to any concert or major spending event should be maintained at a level sufficient to guarantee payment of committed expenditure without recourse to income which is not guaranteed (e.g. ticket sales).

(3) Steps the Trustees will take to establish or maintain at the agreed level or range
The Trustees will ensure that reserves fall within the prescribed range throughout the financial year using the following actions:

Review forecast end year financial position regularly (at least quarterly).

Plan and deliver concert programmes within budget restrictions agreed in advance.

Soloists’ fees and other costs to be agreed with the Treasurer before any binding commitment is given or financial liability created.

Encourage early payment of membership fees to bring funds in early during the financial year.

Change programme in-year if forecast income falls below that necessary to maintain future reserves at the agreed level.

Postpone exceptional projects or concerts if predicted reserves fall below agreed level.

(4) Arrangements for monitoring and reviewing the policy
The reserves policy will be reviewed by the trustees in committee no more frequently than every two years.

 

Reviewed and amended by the Committee of Chesterfield Philharmonic Choir on 20 November 2012.