SPTF Logo with Capital Campaign.png
Slide8.JPG
Slide9.JPG
Slide11.JPG
Slide10.JPG
Slide12.JPG

An Operating Budget Contingency Fund provides a cushion that ensures there is cash available to cover the church’s bills if income declines, as it often does, for example, in the summer months when members are on vacation.

Money has been set aside in the budget each year to add to this fund.  However, in some years, that budget line has been reduced in order to balance the budget.  It currently stands at around $64,000.

While that may sound like a lot of money, it is actually below a generally recognized rule-of-thumb amount for non-profits with a budget the size of RUC’s, which suggests that RUC should have 4-6 months operating reserve on hand or readily available.  At the very least an operating reserve should cover budgeted personnel expenses, which for RUC for 2021 was approximately $328,000.  Four months (1/3 of the year) of that amount is $109,000, and 6 months (half a year) would be $164,000.  Inclusion of additional operating expenses, such as utilities would mean this number should be even higher.  Thus, setting as a goal adding $50,000 to the current fund of $64,000 would be a conservatively low goal for this fund. 

 

Creating a fund of this size would have at least two positive effects.  First, it would eliminate the need for “catch up” funding in the annual budget, which will allow us to continue to focus that budget on the current needs of our congregation and community.  In addition, the funds could be invested to provide additional income, which could be included in the budget.