Why are positive liquid unrestricted net assets important?
Positive liquid unrestricted net assets are a strong indicator of an organization’s baseline health and demonstrate an organization’s ability to scale its operations to its marketplace. Organizations that have positive liquid unrestricted net assets are better-positioned to think about their capitalization structure and needs when the baseline financial needs of the organization are being met. Additionally, positive liquid unrestricted net assets are an important signal of necessary working capital. For these reasons, the Arts and Culture Team believes that its investments can have the greatest impact in organizations with positive liquid unrestricted net assets. To help organizations calculate their positive liquid unrestricted net assets, Kresge is requiring submission of an Unrestricted Net Assets Tool with the preliminary application. Organizations with negative unrestricted net assets should address in their pre-application their plan for resolving the issue and restoring positive
