Parish Reserves >  Sample Policies

Sample Parish Reserves Policies

Here we provide four examples for different churches in different situations......

Example Reserve Policy 1.

Church A is a large church in a reasonably affluent area. The annual income is about £120,000 which includes £15,000 from the hall. The church employs two part time members of staff at a total cost of £25k p.a. The condition of the buildings is generally good. There is a quinquennial inspection due next year. The church currently has general reserves of £50,000.

The PCC discussed the following factors in arriving at their reserves policy: 
Money should only be kept in reserve for specific reasons - whilst the Bible clearly indicates that we should not hoard it is also clear that sensible planning for know events and responsibly for others (including employees) is important. 
A wish to have two months running costs in cash reserves in case of a major problem (£20k) 
In addition to have a further month's salaries in reserves (£4k) 
The quinquennial is not expected to reveal any major works, but minor ones are likely to need doing and it would be prudent to allow for this now (£5k) 
A major ecumenical local mission is planned for next year and Church A is likely to be heavily involved in this. They wish to allocate some funds now to this project although at this stage it is unclear what form the mission will take. They will review this later in the year when the project becomes clearer. 
There was a general wish that more should be spent on outreach to the community.

Policy: It is the policy of this church to hold in reserves the equivalent of two months general running costs and an additional one month's salary costs. It is also our policy to hold an amount for likely building works at the next quinquennial inspection. In view of the forthcoming mission next year we have allocated £10,000 to reserves to cover our involvement. This policy will be reviewed in twelve month's time apart from the mission project element which will be reviewed in six months time when the situation is clearer.
The PCC believe that, at present, we have £10,000 in reserves above what is required and will consider how these funds might be used for local mission and outreach.

Example Reserve Policy 2.

Church B is a church in a small town with annual income of around £75,000. Of this about £25,000 comes from their hall. The church building is Victorian and little recent work has been done on it. There has just been a quinquennial report indicating that urgent work is needed to the building costing around £25,000. The church has reserves of £30,000.

The PCC discussed the following factors in arriving at their reserves policy:
Money should only be kept in reserve for specific reasons - whilst the Bible clearly indicates that we should not hoard it is also clear that sensible planning for know events and responsibly for others is important.
The PCCs main concern at present is the forthcoming building works which could potentially use most of their reserves. It was agreed to allocate £20k of the reserves to the building works and fund raise for the rest. It was also agreed that an annual amount of £5k should be added to the reserves from next year to cover future building costs.
There was concern about the reliance on the church hall income and a feeling that two months income should be kept in the reserves in case the hall tenant got into financial difficulties (£4k).
It was felt appropriate to keep two months general running costs in reserve (£12k)

Policy: it is the policy of this church to keep two months running costs and two months hall income in reserve to cover unforeseen emergencies. In view of the state of the building the PCC will also add £5k to reserves each year to cover work due at quinquennial inspections. In view of the present necessary work the reserves will be reduced to £10k this year and it is our aim to increase them next year to the desired level. This policy will be reviewed in twelve months time.

Example Reserve Policy 3.

Church C is a small village church with income of £25,000. The building is in generally good repair. There is occasional income from hall lets. The church has reserves of £580.

The PCC discussed the following factors in arriving at their reserves policy:
Money should only be kept in reserve for specific reasons - whilst the Bible clearly indicates that we should not hoard it is also clear that sensible planning for know events and responsibly for others is important.
It would be prudent to keep two/three months running costs in reserve (£5,000).
It would also be good to have some funds in reserves to cover future building work.
The PCC have not put any money into reserves in reserves in recent years.

Policy: Church C aims to keep approximately three months running costs in reserves. This is also to cover emergency building work. To achieve this we will aim to put £1k per year into reserves from income until that level is achieved.

Example Reserve Policy 4.

Church D is a smaller urban church with income of £25k. Due to the sale of a piece of land a few years ago it has reserves of £35k. A congregation member left the church a restricted legacy of £20k which can only be used for building works.

The PCC discussed the following factors in arriving at their reserves policy:
Money should only be kept in reserve for specific reasons - whilst the Bible clearly indicates that we should not hoard it is also clear that sensible planning for know events and responsibly for others is important.
The building fund is likely to cover work to the building needed at the nest quinquennial
The PCC has no immediate use for the £35,000 in reserves.
It would be sensible to keep a few months running costs in reserves (say £5k)
The PCC agreed to hold an open meeting to consider how they could use the remaining £30k for a local community project.

Policy: Church D has agreed a reserves policy of holding £5,000 in reserves to cover running costs in the event of a major problem. We will consult with the congregation and others locally to consider how we use the remaining £30k.