Bookbanks Reserves Policy
Policy Owner: Bookbanks
Document approved by: Board of Trustees
Date approved: 12 May 2026
Next review date: 12 May 2027
Background
Bookbanks is a registered Charity with charity number 1204919. It was incorporated on 26 Sep 2023.
Introduction
The trustees of Bookbanks undertake, amongst other things, the responsibility of considering the levels of reserves the charity should hold.
They recognise holding excessive reserves may limit the amount spent on its charitable activities and the benefits it can provide; likewise, if reserves are too low, it may increase the risk of its ability to carry on its activities in the future in the event of any financial difficulties, increasing the risks of unplanned and unmanaged closure and/or insolvency.
Bookbanks has a simple organisational structure. As of 12 May, 2026, alongside the charity's financial commitment to operate each book stall for a minimum of one year, it is also fundraising in order to scale up, with the aim of expanding from 9 partner food banks to 30, nationwide, by 2030.
As each new Bookbanks location is added, we would also aim to hold a minimum of one year’s funding for its operation.
Funding
The majority of Bookbanks’ funding contributes directly towards the set up and management of individual book stalls and volunteers within partnering food banks.
Funding comes from organisations and individuals - some of whom restrict their grant or donation for use at particular book stalls, or geographical region, or for particular purposes, some of whom do not.
Reserves Strategy
Reserves are needed to ensure the sustainability of Bookbanks’ mission, meeting its financial obligations as and when they become due.
Requirements for holding reserves are predominantly:
Cash Flow: to assist with the unexpected peaks and troughs of cash flow;
Contingency: to cover any unforeseen operational costs;
Contingency: to allow time to organise alternative funding should a funder(s) withdraw their funding for any reason;
Contingency: to be able to react to an unplanned opportunity, such as an unforeseen external event, for example a global pandemic.;
Commitment: to cover increased costs due to future designated expansion plans / new sites; and
Closure: for organisational closure due to financial, legal, reputational or unforeseen circumstances.
Reserves will be funded with surplus unrestricted operating funds. The trustees aim to maintain free reserves in unrestricted funds which equate to the sum of the following amounts:
Cash Flow: 1 month of staffing and/or consultancy costs
Contingency: 10% of all income in the last financial year
Closure: a minimum of three months of total expenditure.
One month prior to the Reserves falling below the three month total expenditure target referring to Closure, Bookbanks management must notify the Board and submit to the Board an action plan to return to a sustainable reserves level.
The balances under each of the above categories at the financial year end will be included in the Bookbanks Trustees Annual Report.
Any unrestricted funds surplus to the Reserves policy level must be assigned to planned expenditure for new sites forecast to be opened within the following 3 years.
Surplus Restricted funds are not classified as general reserves, as they must be spent under the purpose specified by the donor. The future use of these surplus funds will be used to further the activity of Bookbanks in the coming years, including expansion as specified above. This will be included in the Bookbanks Trustees Annual Report.
Reserves Accounting Treatment
The reserve fund will be recorded within Bookbanks’ financial records as ‘Reserves’ and will be maintained within Bookbanks’ general bank account. In the event that 6 months of operating costs is achieved, then the Board may, at its discretion, invest such sums in an investment account.
Reserves Investment
The Board will consider investment of funds where it would be beneficial for Bookbanks to do so, while retaining at least 3 months of operating costs within the Bookbanks current account.
All investments must be made according to the following principles:
Funds will be placed in savings accounts with a withdrawal notice of no more than 6 months, unless there is a rationale for a longer-term investment that would benefit Bookbanks.
Risk is managed through diversification of investments, ensuring that the security of funds takes precedence over revenue maximisation.
Funds will be placed with banking institutions regulated by the Financial Conduct Authority, and with Fitch credit ratings at BBB or above.
Reserves Usage
Bookbanks’ management team will identify the need for access to reserve funds and confirm that the use is consistent with the purpose of the reserves as described in this Policy.
This step requires analysis of the reason for the shortfall, the availability of any other sources of funds before using reserves, and evaluation of the time period that the funds will be required and replenished. Authority for the use of operating reserves is held by the Board of trustees.
Reserves and Policy Review
The reserves position is reviewed regularly by the Directors and Treasurer, and further reviewed by the trustees on an annual basis.