Current operating reserve: [$$$]

The Operative Reserve Policy aims for 12 months of operational reserves, meaning that we could keep the organization running for 12 months if current sources of income disappeared. 12 months of expenses per our current budget is approximately [$$$].

Instead of adopting that automatically as our goal, this document lays out what 12 months of expenses would look like were we in a situation where we needed to draw on our reserves and presents a strategy for the amount we should aim to hold in our reserves.

This plan assumes that, were we in a situation where we needed to draw on our operational reserve in a significant way, it would happen alongside a process to sunset the community (e.g, Digital Preservation Network) or transform it (i.e., revisiting the mission and operational model to fit with the current environment). As such, it reflects core operating expenses from our current budget and those we would need to support planning and transition activities. To compare with current budget numbers, please see the [current budget].

The breakdown of expenses below includes annual operating costs and additional projected sunsetting costs.

According to this plan, 12 months of core expenses combined with additional anticipated costs needed for sunsetting or transition for [PLN] would be approximately [$$$].

When [PLN] has generated surplus income in the past, this money has automatically gone into our operating reserve. If [PLN] were to build up its operational reserves well beyond the minimum recommended total, community leadership would determine how to invest those funds back into the development of the community and technological infrastructure.

The following table presents annual operating expenses for the past three years.

The [PLN] Community Research Task Force has estimated it would cost about [$$$]to sunset the network with a year’s notice. If this were to occur, no membership fees would be collected in the final year of operation, so the operating reserve would be used to cover all expenses. [PLN] should maintain a reserve no less that [$$$] or greater than the largest net operating cost from the previous three years.