Doing Good Well
What does (and does not) make sense in the nonprofit world

Chapter 6: Reserves & Fundraising Targets

The Problem of Plenty

Many charities struggle to raise funds. The few that are very successful face a different set of problems.

To start, when is enough, enough in fundraising? Setting fundraising targets sounds simple enough, but it may not be practical in all cases. And when fundraising targets are exceeded, should the charity refund the excess donations to donors or divert the surplus monies to other charitable causes?

For the long term, successful charities have to address the question of how much is enough in reserves? Apart from issues of measurements, there is a difference of views about whether there should be a reserves level and what that level should be. Some faith-based groups have set an extreme level of zero for reserves. This approach keeps charities relevant and accountable.

Finally, whatever it does with donors’ money, a charity must respect the basis under which the money is given. Charities that have violated donor intent have suffered grave consequences.