An operating reserve is a great tool for individuals and churches. A reserve protects from unexpected income loss. Most financial advisors recommend that individuals have at least three to six months of living expenses set aside in a savings account. The goal is to be ready for some kind of unexpected future event. The same holds true for churches.
A tornado could occur disrupting worship services and giving to the church. The serious illness of a generous donor or their death often has serious consequences for a church budget. The closure of an industry in the community can disrupt giving. A reserve fund cushions such a blow to the church. The reserve fund allows the church to continue to cover operating costs while adjusting to its new reality.
A good target for reserves is the operating cost multiplied by three or six. Remember, the operating costs is not the full budget amount. Costs should include items that must be paid each month, such as salaries, utilities, insurance, etc. Now that you have a number, you determine how much to budget for such a reserve.