Question: required by law cash reserve for non for PTO

We would like to make several purchases before the school year ends.IS there an exact percentage base used as to what needs to be in reserve for our non for profit organization or exactly how is it determined

Asked by Anonymous

Answers:

Advice from PTO Today

Rockne writes:
No, there is no minimum. That's up to your group. Many groups like to keep enough on hand to ensure they're able to operate well in the fall (without a huge fundraiser as the first impression with parents), but it's totally your call. Tim

Advice from PTO Today

Craig writes:
There's no law about cash reserves -- you can carry over as little or as much of your budget as you wish from one year to the next. As far as best practice, we recommend that you carry over at least enough so that you don't have to kick off the year with a fundraiser. You'll be more successful at building involvement if the first impression people have of your group isn't asking for money. Beyond that, you might want to keep more in reserve if you're saving for a large purchase, like playground equipment, for example. PTOs don't have the kind of fixed expenses that require a large permanent cash reserve--expenses like payroll, rent, and utilities. If you have a cash shortfall, you simply adjust your activities accordingly -- hold another or a better fundraiser or downsize a program. Bottom line: You can choose to do what seems right for your individual group.