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Strengthening Our Future – The Importance of an Operational Reserve Policy

As a service organization, we dedicate ourselves to making a lasting impact in our communities. And to ensure we can continue our mission for years to come, we must also focus on financial stability. One of the most effective ways to do this is by maintaining an Operational Reserve Policy, which the Montana Lions Clubs District 37 has recently adopted.

This policy will provide a financial cushion to protect against unexpected shortfalls, allowing the District to remain strong and responsive. Just as businesses and families set aside savings for emergencies, our District must also be prepared for unforeseen challenges—whether a drop in fundraising, an economic downturn, or an unexpected increase in expenses.

What Is an Operating Reserve?

An operating reserve is a portion of unrestricted funds set aside to cover operational expenses in times of financial uncertainty. Unlike endowments or restricted funds, these reserves provide liquidity, allowing the District to continue its core functions without disruption.

With this new policy, District 37 is committing to a structured approach to saving and spending, ensuring that we always have the resources necessary to fulfill our mission while also freeing up funds for growth-focused initiatives.

Why This Policy Strengthens Our District

• Financial Stability – By maintaining a set reserve, the District is better prepared for unexpected events like declines in fundraising or an economic downturn. This stability ensures that we can continue to serve our clubs and communities without interruption.
• Strategic Investment in Growth – Historically, a significant portion of the District’s cash reserves sat unused, acting more as a savings account rather than a tool for growth. This policy clarifies how much should be set aside for emergencies while freeing up the remaining cash for initiatives such as membership recruitment, leadership training, and direct support to clubs.
• Better Club Support – When the District operates with confidence in its finances, it can invest more in local clubs by providing grants, training, and resources without the fear of running short on funds.
• Stronger Reputation & Accountability – Having a formal policy demonstrates financial responsibility to our members and stakeholders, reinforcing trust in our leadership and stewardship.

Why Your Club Needs an Operating Reserve Policy

Just as our District benefits from financial planning, local clubs can also strengthen their operations by implementing an operating reserve policy. A club that plans ahead ensures that service projects, membership initiatives, and community programs continue even during financial difficulties.

By setting aside three to six months of operating expenses in a dedicated reserve fund, clubs can:

• Continue service projects even if fundraising slows down.
• Handle unexpected expenses (e.g., event cancellations, rising costs).
• Invest in growth opportunities like recruiting and marketing efforts.

The adoption of this policy is a major milestone for our District, ensuring that we can serve more, grow more, and strengthen our clubs across Montana for generations to come.

By Lion Steve Dogiakos