The Big Society, charities and reserves: money too tight to mention?

Today’s Financial Times quotes research from the National Council for Voluntary Organisations which found that 36% of charities are operating hand-to-mouth without any cash reserves.

The FT suggests that this raises “profound doubts about whether [these charities] can survive the imminent cull of Whitehall budgets and help deliver David Cameron’s “big society”.

The article notes the current squeeze on contracts and grants. It also observes that some funders are wary of supporting charities with significant reserves and that funding sometimes only covers costs. Of course, some trustees may also bear some responsibility for failing to address the issue of reserves and setting a reserves policy for maintaining financial viability.