Bookbanks Reserves Policy

Policy Owner: Bookbanks

Document approved by: Board of Trustees

Date approved:  October 30, 2025

Next review date: October 30,  2026

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 27 October, 2025, 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 6 partner food banks to 30, nationwide, in the next 3-5 years. 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 ringfence 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; 

  • Commitment: to cover increased costs due to future designated expansion plans / new sites; and 

  • Closure: for organisational closure or unforeseen external event, for example a global pandemic.

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 costs 

  • Contingency: 10% of all income in the last financial year 

  • Commitment: increase in costs due to new sites forecast to be opened within the next 18 months, as included within the Bookbanks Forecast Cash Flow document, and to fund operating each location for a minimum of one 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

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 costs is achieved, then the Board may, at its discretion, invest such sums in an investment account.

Reserves Investment

There are no immediate plans to consider investment of any reserves until they reach a level where it would be beneficial for Bookbanks to do so, at present time that threshold is an amount equal to  6 months of total costs.

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.