A Word from the Treasurer
Posted: 6 Mar 2026 by
Why the IAFL Maintains Reserve Funds: A Strategic Necessity
In the world of professional associations and organizations, financial stability is not just a goal—it's a necessity. One of the most effective tools for ensuring long-term sustainability is the establishment and maintenance of reserve funds. But we are sometimes asked by our Fellows what are reserves and why does IAFL need them (or why can’t we spend more of them)?
Reserve funds are financial resources we set aside to cover unexpected expenses, economic downturns, or strategic investments. Think of them as a financial safety net providing our organization with financial stability; a cushion that helps the impact of any unforeseen events such as a meeting cancellation, severe currency fluctuations or a global pandemic, ensuring that our day to day operations can continue without disruption. The global organization also currently underwrites the meetings held by the Asia Pacific Chapter which in turn requires us to have sufficient reserves to pay hotel and destination management company deposits before meeting income has been collected.
The main source of revenue for the IAFL is the annual membership dues. Sponsorship income raised for our meetings off-sets costs for those meetings, and in some instances that does result in meetings making make a surplus. However, it is important to note that all our meetings are budgeted on the assumption that they will breakeven financially; they are not budgeted to make a surplus but over the years, some meetings have been wildly successful in terms of attendance beyond what was projected or expected. It is these meeting surpluses which has enabled the organization to invest in different projects and to build our reserves.
Having reserves enables the IAFL to seize opportunities such as launching a new program, for example our Early Career Award, without needing to secure external funding or cut our existing programs. Reserve funds signal that our organization is prepared, responsible, and committed to long-term success.
The IAFL is governed by our bylaws that require prudent financial planning and management. In accordance with our financial protocol, the Treasurer and Assistant Treasurer receive the monthly financial reconciliation. The IAFL Executive Committee receives quarterly financial reports where we review the statement of accounts, and we also review the organization’s current income and expenditures in comparison to the budget. Our Investment Committee, chaired by President Elect Designate, Jorge Cestero monitors the IAFL’s investment fund which was established in 2017 and is managed by Merrill Lynch. The fund’s current growth is 10% per annum.
There’s no one-size-fits-all answer on how much should be held in reserve, but a common benchmark for most organizations is to maintain reserves equal to 3 to 12 months of operating expenses. For the IAFL, a year’s worth of operating expenses currently equals just over $400K (in 2025 it was US$408K).
Reserve funds are more than just a financial buffer—they’re a cornerstone of responsible governance and strategic foresight. The IAFL is committed to serving its Fellows and advancing its mission, maintaining healthy reserves is part of that mission. You will be happy to know that during my tenure as Treasurer of the IAFL, we have grown our reserves from $ 1.05 M to $ 2.1 M. In sum, our organization is not only stable but is also growing.
Jason Naimi
IAFL Treasurer
