Whats the difference between an endowment and an operating reserve?
An operating reserve is a board-designated fund, which may act like an endowment because an organization chooses not to touch the principal. Principal is available to meet emergency needs should the board choose to use it. Usually operating reserves are managed and invested by the organization’s staff and board. An endowment, on the other hand, is a fund which has a principal that the organization is not able to invade. Sometimes this can be accomplished only by placing the endowment outside the reach of the organization.
