How to Structure Nonprofit Investment Accounts: Fund Movement Policy Template

Overview

Creating a clear and structured fund movement policy helps nonprofits manage their finances in a way that aligns with their mission and long-term sustainability. A well-designed policy should define the purpose of each fund, outline decision-making authority, and establish the circumstances under which assets are moved between different accounts. This ensures that resources are used effectively and financial stability is maintained. While this template focuses on core financial buckets—Cash (Operating and Reserves), General Reserves, and Long-Term Assets—it is important to note that nonprofits may have additional buckets such as Designated Funds or Capital Reserves, depending on the organization’s specific needs and financial strategies.

What to Include in the Policy

Purpose of the Policy: Define why the fund movement policy is important and how it supports the organization’s financial stability and mission.
Names and Purposes of Funds/Buckets: Identify each financial bucket (e.g., Cash, Operating Reserves, Long-Term Assets) and describe its specific purpose within the organization’s overall strategy.
Decision-Making Authority: Specify who has the authority to move assets between funds (e.g., Finance Committee, Executive Director, CFO), and outline any approvals needed (e.g., Board of Directors).
Criteria for Moving Assets: Describe the circumstances and financial targets that trigger fund transfers (e.g., excess cash, reserve levels, or strategic funding needs).

Documentation and Review: Set guidelines for documenting all fund movements and establish a review process to ensure alignment with organizational goals.

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