Monday, April 10, 2023
Cash Talks: The Impact of Financial Reserves on Theatre Companies
AMT Lab @ CMU: Financial reserves allow organizations grace in times of financial hardship. The pandemic into post-pandemic economic environment set many arts organizations into financial tailspins that they are still recovering from. Financial reserves need to be accessible, ie liquid, and there needs to be “enough”. What defines enough? According to the Nonprofit Finance Fund, most nonprofits have less than three months of reserves on hand
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I think that this is something that not a lot of people think about regularly as it is kind of terrifying to contemplate for very long but I know just how important it is to have financial reserves. My mom used to work at a small children’s museum non profit in my home town and there were long stretches of time during which the museum was solely functioning on their rainy day fund to keep people employed and the exhibits operational. It was extremely stressful for my mom but their good planning when it comes to financial reserves is what kept my mom employed through tough times in the area. This is especially important to consider when considering the recent pandemic that shut the world down for about two years, two years that killed many non profits and, more specifically theater’s across the county if not across the world at large.
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