The Most Expensive Thing Your Association Owns Is the Money It Won't Spend

The reserve policy review is usually the calmest item on the agenda. The finance committee pulls up the number, checks it against the benchmark, confirms six months of operating expenses sit safely in the bank and moves on. Nobody argues. Nobody asks a hard question. The relief in the room is almost physical: The association is safe.

Safe from what, though?

Most reserve policies are built to survive one specific scenario: a sudden, severe revenue shock. A lost conference. A membership collapse. A recession that guts dues income overnight. That is a real risk worth protecting against. It is also a low-frequency one. Most associations will go years, sometimes decades, without ever drawing down a reserve for the crisis it was built to survive.

Please select this link to read the complete article from ASAE's Center for Association Leadership.