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Nonprofit Operating Reserve CalculatorMonths of Expenses Covered

What do these figures come to once the work is shown?

Months of cash operating expenses that available reserves cover, and the gap to a target number of months.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Months of operating expenses covered
3.68
Available reserves over monthly cash operating expenses
Available operating reserves
$350,000
Monthly cash operating expenses
$95,000
Drawn to one scale
Available operating reserves$350,000
Monthly cash operating expenses$95,000
Reserves needed for the target$285,000
Surplus (+) or shortfall (-) against the target$65,000
All results
MeasureResult
Months of operating expenses covered3.68
Available operating reserves$350,000
Monthly cash operating expenses$95,000
Days of cash on hand112.1 days
Reserves needed for the target$285,000
Surplus (+) or shortfall (-) against the target$65,000
How this was worked out
Work shownrecomputed as you type
Available reserves = cash and investments without donor restrictions - board designations not available + undrawn credit you choose to count
Monthly cash expenses = (annual operating expenses - noncash expenses) / 12
Months covered = available reserves / monthly cash expenses

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Available reserves = cash and investments without donor restrictions - board designations not available + undrawn credit you choose to count
  • Monthly cash expenses = (annual operating expenses - noncash expenses) / 12
  • Months covered = available reserves / monthly cash expenses

How it works

Reserves are measured in months of spending so organizations of different sizes compare. The numerator should hold only resources that can pay for operations: leave out donor-restricted net assets and any amount the board has set aside for another purpose.

Depreciation is taken out of the monthly figure because it uses no cash. Whether to count an undrawn line of credit is a policy choice; the result shows it separately so a reader can tell.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Is there a required number of months?

No law sets one for nonprofits in general. Boards set a target in a reserve policy, and lenders or funders sometimes set their own.

Should I use budgeted or actual expenses?

Use the coming year's budget when the organization is growing or shrinking, and last year's actuals when it is steady. State which one in the policy.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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