I am the incoming treasurer of a small non-profit in a major city in the western US. We have current yearly operating expenses averaging about $30k a year, over the last 3 years (total, including our mortgage). We've been financially stable for almost 20 years, stable in the current location for nearly 9 years. We usually make a little money every year (hard to calculate average over the last 3 years due to some one time expenses that don't give an accurate picture). The only debt we owe is on the mortgage, which is at a fixed rate.
We currently have nearly $70k in cash in our business checking account, and the amount has been slowly growing, year after year. Is there a spec for the advised amount of cash on hand a non profit should keep? I assume it varies a lot, based off how different ones operate and make money, but just looking for some guidance or resources that I could look into more.
It pains me thinking about that amount of resources sitting there every year, unused, and losing spending power to inflation. My thinking was that we could use the excess to pay down our mortgage quicker, or invest it in the market so that it could return a percentage to us. I should also note, that as of right now, we don't have a line of credit/business credit card, which I think would impact the emergency cash reserves.
Thanks in advance!
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