The Reserve Fund

The Reserve Fund bridges gaps between funding commitment and payment.

A major challenge for all nonprofit organizations, particularly we who receive funding from government sources, is bridging the gap between the time funds are committed and the point at which funds are actually received.

The Reserve Fund acts essentially as an internal line of credit. Money is “borrowed” from the Fund to stand in place of the funds that have been committed but have not yet been delivered. Once that money is received, the Fund is replenished and can continue to act as that line of credit indefinitely.

The greater our Reserve Fund, the greater our ability to weather the fluctuations in the State of Illinois’ ability to fulfill their payment agreements with us. In addition, the Reserve Fund enables Alternatives to cover any shortfalls projected due to the lapse in time between foundation or individual funding commitments and the fulfillment of those pledges.

In fiscal year 2010, its first year of existence, the Reserve Fund saved Alternatives an estimated $6,000!