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A limit on savings?

Your Legal Questions Answered

A limit on savings?

Our nonprofit has been slowly increasing the balance in the corporate bank account without any plan for how to reinvest the funds. Is there a limit to how much a nonprofit can have in a savings account or carry over without being spent from year to year?

No. There is no limit on the amount of reserve funds. Harvard University’s invested surplus and endowment reached more than $34 billion (that’s b as in billion) at the end of its fiscal year on June 30, 2007.
Even if you have only a small surplus for investment, however, you should pay attention to the return you might be able to earn and still provide the liquidity you need to pay your bills and provide your program. A corporate bank account may not give you the return you could get from other forms of investment such as money market accounts or certificates of deposit (if you won’t need some or all of the money for a while).
Tuesday, April 22, 2008

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