Cash Reserves: Stability and Opportunity!

Ideas & Perspectives
Ideas & Perspectives

Volume 32

No. 4//

March 29, 2007

It has been no statistical fluke that in all three iterations of the ISM Stability Markers®, the No. 1 or No. 2 marker has been cash reserves. While this item is a formulaic mix of cash reserves, debt, and endowment, the practical piece of this is the cash reserve itself – an amount of money equal to 15% of the operations budget and 2% of the replacement of the school facility to a maximum of 20%. This is neither a quasi-endowment (i.e., restricted by the Board for its own purposes) nor the seed money for a real endowment. It is cash in the bank that can be accessed at a moment’s notice.

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