Pillar 1: Cash Reserves

Cash reserves are like your organization’s emergency fund. They help you navigate slow months, delayed payments, or unexpected expenses without added stress. Having reserves in place gives you stability and breathing room when you need it most.

What we recommend:
🎯 Aim to have 90 to 180 days of cash on hand, based on your average expenses from the past six months. For example, if your monthly expenses are $100,000, aim for $300,000–$600,000 in reserves.

How to calculate it:

1. Add up your expenses from the last six months.
2. Divide by 6 to get your monthly average.
3. Multiply by 3 (for 90days) or 6 (for 180 days).

Helpful Tip: If 90-180 days feels out of reach, start small. Build toward 30 days of reserves first, then increase your goal over time.

Pillar 2: Consistently Achieve Positive Net Income

Positive net income means your organization is bringing in more than its spending. It’s how you grow, build cash reserves, reinvest in your team, and stay open long-term.

How to track it:

• Use a monthly Profit & Loss (P&L) report to monitor. The P&L is also known as the Income Statement or the Statement of Activities.
• Make sure Total Revenue is consistently higher than Total Expenses each month.

What to watch for:

• Short-term dips can happen due to seasonality or timing, and that’s okay.
• But if you're consistently breaking even or operating at a loss, it’s a sign to dig deeper—review your billing practices, staffing model, or service mix to find opportunities for improvement.
• Declining revenue over time may indicate a loss of clients or a shift in demand for services. Stay on top of trends to catch it early.

Learn more: Understanding the Profit & Loss Statement

Pillar 3: Positive Total Equity (Net Worth)

Equity is the big-picture view of your financial health. It shows the difference between what you own and what you owe. A positive equity number means your organization has more assets than debts — and that’s key to long-term sustainability.

How to check it:
You’ll find this information on your Balance Sheet (ask your accountant or check your QuickBooks dashboard)

• Assets are things you own (cash, equipment, buildings).
• Liabilities are what you owe (credit cards, loans, payroll taxes).
• Equity = Assets – Liabilities.

Goal:

🎯 Keep your equity positive and growing. It’s your organization’s financial safety net and a sign that you're building a strong, resilient foundation for the future

Learn more: Understanding the Balance Sheet

‍Bringing It All Together

When all three pillars are in place — healthy cash reserves, positive net income, and positive total equity — your organization is financially resilient. You’ll have the stability to serve your community, pay your staff, respond to emergencies, weather delays in payment, and grow intentionally.