Our bylaws don't include a specific dollar amount to carry over for next year but when I became treasurer it was explained to me that we needed to have enough funds available to cover the immediate expenses plus a small cushion. We give out $50.00 teacher grants, pay for some classroom subscriptions and some other small expenses which are usually paid out before the end of September and these total approx. $3,000.00 so we try to start and end with $3,500.00 to $4,000.00. I agree that the figure can't be a %. Check what your expenses have been for the last few years before your fall fundraiser kicked in and use an average on what you will need to have on hand for immediate expenses.
I am a member of two PTOs, both of which have required carryover amounts in their Bylaws. One school requires at least $1000, the larger school (Gr 2-5) requires $2000. In both cases, we tend to carryover $1-2K more, but, really it's not necessary because,like JHB, we do our fundraising early and have very few early expenses. We try pretty hard to track our surplus and spend our balance down during the last month or so of school.
I agree that 50% is too high. What are you saving the money for? Is there a special project planned? If you start your year with that much money, and plan a regular fundraiser, you'll have a lot of money in the bank. If you always carry over 50%, you'll never spend it unless you take a year off fundraising or your fundraiser just plain stinks one year. If our PTO carried over 50% of the budget, I would have a hard time buying alot of wrapping paper - my donation might not even be spent this year...
Our bylaws specify we hold over $2000, but being rather conservative, I usually push for $3000. It's a flat amount, not a percentage. School starts mid-August and our primary fundraiser comes in by end September. So we probably don't even need the full $2000. But we feel far more comfortable starting the year with enough funds "just in case".
Hi- currently my HSA is in a discussion about the % of our annual expenses that should be budgeted as "cash reserves" for the beginning of the year. My Treasurer recommended 50 %- I feel as a non profit we should be as close to a zero balance at the end of the year as possible, reserving only those expenses that occur before our Fall fundraising kicks in.
