---
title: "What are charity reserves? | CharityCompare"
description: "Reserves are the free funds a charity could spend if income stopped."
source: https://www.charitycompare.org.uk/answers/what-are-reserves
retrieved: 2026-08-18T01:25:37.518Z
license: "Charity data © Crown copyright, Open Government Licence v3.0"
---

Charity finances

# What are charity reserves?

**In short:** Reserves are the free funds a charity could spend if income stopped. CharityCompare shows them as months of operating costs — very low can mean fragility; very high may mean donations are accumulating unless the trustees explain why.

Data from [CharityCompare editorial](https://register-of-charities.charitycommission.gov.uk/), last updated 12 August 2026.

**Reserves** are not the same as total cash in the bank. Free reserves exclude restricted gifts, endowments, and money tied up in buildings. The useful donor figure is **months of operating costs**: free reserves divided by typical monthly spend.

There is no legal minimum. A common healthy range is about **3–24 months**. The Clarity Score awards full marks in that band and tapers on both sides, because a single cutoff would punish honest models (long-term care commitments, volatile fundraising, or a building-heavy hospice).

- **Very low** — one late grant can force cuts. Ask how the charity would manage a bad year.

- **Very high** — may be prudent, but should match a published reserves policy. Unexplained hoarding is a reason to read the trustees’ report, not an automatic “do not give.”

Restricted vs unrestricted funds are explained in [restricted vs unrestricted](https://www.charitycompare.org.uk/answers/restricted-vs-unrestricted-funds). The longer guide is [charity reserves explained](https://www.charitycompare.org.uk/guides/charity-reserves-explained).

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- [→ What is a good admin cost ratio for a charity?](https://www.charitycompare.org.uk/answers/good-admin-ratio)
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Look up any UK charity's free Clarity Score from regulator filings.

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**Information only** — see [guides](https://www.charitycompare.org.uk/guides) for more detail.