Operating Reserve Policy

regarding the course of action that may need to be taken. Any balance in excess of 120% of the minimum level defined in the prior paragraph, will be considered funds not designated by the Board of Directors for other purposes.

Transfer or Withdrawal of Funds

1. The transfer or withdrawal of funds from the ISU Alumni Association Life Members Fund should be done only as needed and in amounts authorized by the Board of Directors.

2. Any transfer or withdrawal shall be signed by any two (2) of the following four (4) individuals: a. Talbot Endowed ISUAA President and CEO

b. Director of Office Operations c. Executive Assistant to the Talbot Endowed ISUAA President and CEO

d. Director of Finance and Alumni Center Operations As stated in Article V, Section 1 of the ISU Alumni Association bylaws, and reaffirmed at the Oct. 20, 2000, Board of Directors meeting. Adopted by the ISU Alumni Association Board of Directors May 21, 2010 and amended Feb.15, 2019.

OPERATING RESERVE POLICY

Purpose of Operating Reserves

Operating reserves are unrestricted funds, or funds not designated by the Board of Directors for other purposes, set aside to stabilize the Association’s finances by providing flexibility and a safety net against unexpected cash flow shortages, expenses, or losses, including but not limited to when:

• operating shortfalls occur; • unexpected emergencies or losses occur; • replacement or improvement of major capital assets including technology upgrades as required; • capital is needed to start new activities, take advantage of unexpected opportunities, or to enhance programming; • losses on investments cause reduced investment earnings, thus providing the Association the ability to carry out activities that will achieve its mission while also developing and maintaining capacity for mission relevance in the future.

Reserves may consist of unrestricted (undesignated) cash, certain receivables, investments, or other assets that can be converted into cash quickly.

Definition of Operating Reserves Working capital

Current operating working capital includes cash, proceeds of certain receivables, or other assets held in ISUAA bank accounts, other short-term investments, or held in accounts authorized at the ISU Foundation or Iowa State University, on behalf of the ISUAA. These funds are not donor-restricted or Board-designated for specific purposes. These reserves are liquid and may be available for current operating expenses immediately or within 30 days.

Long-term operating reserves

The Association also maintains the ISU Alumni Association Operating Reserve Fund, managed by the Iowa State University Foundation. This fund was established in accordance with the Association’s Articles of Incorporation. This fund is boarddesignated, and the Board of Directors may authorize expenditures from this fund at any time in order to pay current expenses of the corporation or in the furtherance of its objectives and purposes. Funds in excess of 120% of the required minimum requirement in the ISU Alumni Association Life Members Fund will be considered funds not designated by the Board of Directors for other purposes, within compliance of the Life Members Fund Policy. Long-term operating reserve funds may be available for current operating expenses within 90 days.

Fund Balance

The minimum operating reserve in the ISU Alumni Association Operating Reserve Fund will be an amount to be set as an “emergency reserve” equal to 90 days of budgeted operating expenses.

Transfer or Withdrawal of Funds

1. The transfer or withdrawal of funds from the ISU Alumni Association Operating Reserve Fund should be done only as needed and in amounts authorized by the Board of