Q&A: Should We Start Digging into Our Reserves?

My church is fortunate enough to have a number of investments in reserve. We really don’t want to deplete those investments, but our current cash flow is down because of the pandemic and we’re wondering if now would be the time to convert some of those investments into cash. Should we start digging into our reserves? Is this a good or bad idea?

Like you, churches and other organizations with liquid assets will sometimes put additional assets into marketable security holdings with the hope of generating investment income while they’re being held as reserves.

The assumption is that you would convert those investments to cash when they are needed. Normally, we don’t assume that everyone would want to liquidate their investments and convert them to cash at the same time, but that is, to a large extent, what happened early in this pandemic. That is one of the reasons the ...