Reserves Policy
Adopted by the Board of Trustees: 2nd February 2026
Next review due: February 2027
1. Purpose of this policy
Richmond Volleyball Club (“the Club”) holds reserves to ensure its financial stability, resilience, and ability to pursue its charitable objectives.
The purpose of this policy is to:
- Explain why reserves are held;
- Define how much should be held;
- Clarify how reserves may be used; and
- Set out the governance arrangements for reviewing and designating reserves.
This policy is intended to meet Charity Commission expectations and support the Club’s transition to Charitable Incorporated Organisation (CIO) status.
2. Definition of reserves
For the purposes of this policy, reserves are defined as:
Unrestricted funds available to spend, after allowing for known commitments and liabilities.
The Club distinguishes between:
- Operational reserves – working capital required for delivery;
- Designated reserves – unrestricted funds set aside by the trustees for specific future purposes; and
- Unrestricted general reserves – funds available for general use.
3. Why the Club holds reserves
The trustees consider it prudent to hold reserves to:
- Manage seasonal fluctuations in income and expenditure;
- Absorb unexpected cost increases, particularly venue hire and coaching;
- Protect delivery during periods of lower participation or income volatility;
- Support planned growth and development, including capital investment where required;
- Ensure the Club can meet its short-term liabilities without disrupting activity.
The Club does not aim to accumulate excessive reserves and does not generate surpluses for their own sake.
4. Structure of reserves
a) Divisional operational reserves
Each division (Men’s, Women’s, Beach, and Community) is expected to hold sufficient operational reserves to:
- Meet short-term commitments,
- Manage normal in-year volatility, and
- Respond to modest adverse events.
As a guideline, trustees expect divisions to hold between 2 and 4 months of typical operating expenditure, adjusted for risk and seasonality.
b) Designated reserves
The trustees may designate unrestricted funds for specific purposes where there is a clear strategic rationale.
At present, the trustees have designated:
- Beach Division Future Growth Fund
Funds accumulated to support planned future growth and development within the Beach Division, including activities requiring capital investment. These funds are being built gradually over time in recognition of the scale and timing uncertainty of future plans.
Designated funds remain unrestricted in law but may only be used for their stated purpose unless the trustees formally resolve to remove or vary the designation.
c) Unrestricted general reserves
The Club also maintains a modest level of unrestricted general reserves to meet club-wide obligations, such as affiliation fees and governance costs.
The trustees’ aim is to maintain unrestricted general reserves sufficient to cover at least one year of unavoidable running costs for each Division. As centralised costs are low this reserve is only required to be at a very modest level.
5. Target level of reserves
The trustees do not set a single aggregate reserve target. Instead, they assess reserve adequacy by reference to:
- Divisional risk and scale of activity;
- Known cost pressures and commitments;
- Planned development and capital needs;
- The balance between operational, designated, and unrestricted funds.
At each year end, trustees will confirm whether the level of reserves held is:
- Adequate,
- Excessive, or
- Insufficient,
and will record their reasoning in the annual report.
6. Use of reserves
Reserves may be used only where:
- Income in a given period is insufficient to meet costs;
- There is an unforeseen or exceptional expenditure requirement; or
- Trustees have approved expenditure in line with a designated purpose.
Use of designated reserves requires explicit trustee approval.
The trustees will ensure that use of reserves does not compromise the Club’s ability to continue as a going concern.
7. Review and reporting
- This policy will be reviewed annually by the trustees.
- The level and purpose of reserves will be disclosed each year in the Trustees’ Annual Report.
- Any material changes to reserve designations will be formally minuted.
8. Statement of prudence
The trustees believe that maintaining appropriate reserves is a responsible and necessary practice, enabling the Club to balance financial stability with the effective delivery of its charitable objectives.
Optional trustee resolution (recommended)
“The trustees adopt the Reserves Policy dated [date] and confirm that reserves held as at 31 May 2025 are consistent with this policy and adequate for the Club’s foreseeable needs.”
Reserves Policy mapped to the Risk Register
This table explicitly links financial risks to how reserves mitigate them, which is exactly what regulators and independent examiners expect to see.
| Key risk | Impact if realised | How reserves mitigate risk | Relevant reserves |
|---|---|---|---|
| Sudden increase in venue hire costs | Deficit; reduced programme delivery | Divisional operational reserves allow costs to be absorbed while fees or programmes are adjusted | Divisional operational reserves |
| Coaching availability or cost inflation | Programme disruption or quality reduction | Reserves provide short-term cover while contracts or delivery models are reviewed | Divisional operational reserves |
| Lower than expected participation | Income shortfall mid-season | Reserves smooth seasonal volatility and protect delivery | Divisional operational reserves |
| One-off exceptional costs (equipment, safeguarding, compliance) | Unplanned expenditure | Use of reserves avoids immediate impact on participants | Divisional and central reserves |
| Need for capital investment to support growth (Beach Division) | Inability to expand or missed strategic opportunity | Gradually accumulated designated funds enable planned investment without destabilising core activity | Beach Division Future Growth Fund |
| Club-wide obligations (affiliation, governance costs) | Reputational or compliance risk | Unrestricted general reserves ensure obligations can be met | Central unrestricted reserves |
| Cashflow timing differences | Short-term liquidity pressure | Operational reserves cover timing gaps between income and expenditure | Operational reserves |
Richmond Volleyball Club
Reserves Policy (Summary)
Purpose
Richmond Volleyball holds reserves to ensure its financial stability, support the continuity of its activities, and enable the Club to plan responsibly for the future.
The Club does not seek to accumulate reserves unnecessarily, but recognises that holding appropriate reserves is essential to manage risk and deliver its charitable objectives.
What we mean by reserves
Reserves are defined as unrestricted funds available to spend, after allowing for known commitments.
The Club distinguishes between:
- Operational reserves – working capital for day-to-day delivery;
- Designated reserves – funds set aside by trustees for specific future purposes; and
- Unrestricted general reserves – funds available for general club use.
Why reserves are held
Reserves are held to:
- Manage seasonal and year-to-year fluctuations in income and costs;
- Absorb unexpected increases in venue, coaching, or delivery costs;
- Protect delivery during periods of reduced participation;
- Support planned development and growth, including where capital investment is required;
- Ensure the Club can meet its short-term obligations.
Designated reserves
The trustees have designated part of the Club’s reserves to support future growth within the Beach Division, recognising that planned development will require capital investment. These funds are being built gradually over time and explain the higher cash balance held by the Beach Division.
Designated funds remain unrestricted in law but may only be used for their stated purpose unless trustees formally decide otherwise.
How much we aim to hold
The trustees do not set a single fixed reserves target. Instead, they review reserves annually, taking into account:
- The scale and risk of activities,
- Known financial pressures,
- Planned development and investment.
The trustees confirm each year whether reserves are adequate for the Club’s foreseeable needs.
Review
This policy is reviewed annually and the Club’s reserves position is reported in the Trustees’ Annual Report