Reserves policy

(Last reviewed 7 October 2021)

Forever Active Forum Ltd is a registered charity and its activities generate income from class fees, membership fees and the sale of some items (e.g. exercise DVDs). As a charity, and given the age and circumstances of many of Forever Active’s members, charges are kept as low as possible. The Board aims to ensure that class fees cover the relevant direct costs (instructors’ fees and venue hire) but other sources of income (principally donations and grants) have to be found to meet the necessary administrative costs and other overheads.

In seeking to ensure that Forever Active can continue to operate, the Board has always been aware that external factors can upset careful budgets. In the past the risks were such things as changes in the availability and cost of venues and changes in Health and Safety law entailing costs in retraining instructors. The Covid pandemic was an external factor that had not been foreseen and which severely disrupted Forever Active’s operations reducing its funds to a level that raised doubts about the charity’s survival.

The Board has in the past identified a desirable level of reserves, generally setting a figure representing payments in a typical 3 month period (ignoring grants for specific purposes and the associated expenditure). As Forever Active’s activities are able to grow again, that would suggest that there should now be some £20,000 in designated reserves, a figure that should increase in succeeding years. The Balance Sheet as at 31 August 2021 shows no unrestricted funds held as reserves, the limited available funds being the accumulated balance on the income and expenditure account.
The aim must be to find sources of income that sustain the charity’s activities and when possible enable some funds to be identified as reserves.

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