How does Kresge prefer a building reserve to be structured?
An organization can pursue two options. First, an organization may choose to create a separate reserve fund to support the ongoing facilities needs that is replenished as the funds are used. If an organization chooses to pursue this option, it must demonstrate a strategy and plan for replacing the reserves. For the second option, an organization may choose to create a designated endowment, in which only the earnings from core principal may be used for facilities needs. The Arts and Culture Program Team recognizes that for some organizations – those that operate in a complex context and on a long-term time horizon – an endowment restricted to the funding of ongoing capital improvements may be an appropriate way to secure their core facility needs. In these cases, the Arts and Culture Program Team may consider contributing to such a restricted endowment. The restricted endowment should be designed to generate the necessary income to meet the long-term capital needs of the facility. For m
