How much of ALSAC’s annual budget is retained as reserves each year and what are the reserve policies?
Executive summary
ALSAC’s public filings reviewed do not state a simple, fixed percentage of the organization’s annual budget that is “retained as reserves” each year; instead, the combined ALSAC–St. Jude financial statements disclose large investment balances, contractual funding commitments, and governance by bylaws without articulating a crisp reserve-rate policy in the excerpts provided [1] [2]. The most concrete obligation visible in the filings is that ALSAC maintains investment commitments and periodic advance funding responsibilities (roughly $974 million and $1.0 billion at June 30, 2024 and 2023), which functionally constrain liquidity and explain why ALSAC holds substantial assets beyond annual operating needs [2].
1. What the ALSAC–St. Jude combined statements actually disclose
The ALSAC–St. Jude combined financial statements describe that transactions between the Hospital and ALSAC are eliminated in combination, that operations are overseen by boards, and that ALSAC is a not‑for‑profit established to raise awareness and funds for the Hospital, but the excerpts supplied do not include a line saying “we hold X% of annual budget as reserves” or a named reserve-target policy in those documents [1] [3]. The 2024 statement highlights investment positions and describes obligations under investment contracts, signaling significant financial resources managed by ALSAC but not translating those balances into a publicly stated reserve-rate [2].
2. The closest thing to a reserve policy in the available reporting: contractual commitments and investments
ALSAC’s filings explicitly note obligations to “periodically advance funding up to contractual levels,” with those commitments reported at approximately $974 million and $1.0 billion at June 30, 2024 and 2023, respectively, which implies that a meaningful portion of ALSAC’s assets must be available or liquid enough to satisfy those commitments [2]. Those contractual commitments — described in the audited combined financial statements — operate as a de facto reserve requirement: funds are held not merely for operating cushion but to meet contractual and programmatic funding obligations to the hospital and other arrangements [2].
3. Public fundraising scale and why that matters for interpreting reserves
Public reporting and organizational summaries indicate ALSAC raises billions annually — for example, a widely‑referenced summary states ALSAC raised $2.6 billion in 2024 and supplies the context that ALSAC funds the hospital’s operating budget through private donors [4]. When an organization raises sums at that scale and also carries multi‑hundred‑million‑dollar advance‑funding commitments, auditors and boards commonly retain larger liquidity cushions and invest across multi‑asset portfolios; the ALSAC statements reference diversified investments including global equity and hedge funds, another sign that reserves are managed as part of an investment and liquidity strategy rather than as a fixed percentage of a budget [2].
4. What the reporting does not answer and the limits of available sources
None of the provided excerpts include a formal reserve-policy statement specifying a target reserve percentage (for example, “maintain X months of operating expenses” or “Y% of annual budget”), nor do they show a schedule that consistently earmarks a fixed percent of annual revenue to reserves; therefore, a precise answer of “ALSAC retains X% of budget as reserves each year” cannot be supported from the supplied materials [1] [2] [3]. The bylaws are cited as governing operations, but the snippets do not reproduce any bylaw language that establishes a reserve policy, and the combined statements emphasize investments and obligations rather than a transparent reserve ratio [1] [2].
5. Why this opaque presentation matters and how to follow up
The practical takeaway is that ALSAC manages sizeable financial assets and contractual commitments that create functional reserve needs, but it does not appear — in the provided filings — to present a simple public reserve target expressed as a percent of annual budget; stakeholders seeking a definitive reserve percentage should request the organization’s detailed board governance documents, treasury or investment policy, and the full audited financial statements (beyond the excerpts provided) where reserve targets or liquidity policies might be set out in detail [1] [2]. Alternative viewpoints exist: some nonprofit transparency advocates press for explicit “months-of-operating-expense” reserve targets (a practice visible in other nonprofits and public entities), while organizations with large multi‑year funding commitments sometimes prefer more flexible liquidity and investment policies that are not reducible to a single percentage — an implicit agenda ALSAC’s filings reflect by emphasizing commitments and diversified investments (p1_s13; compare common reserve guidance used by other entities in the public excerpts, e.g., institutional reserve policies described elsewhere) [5] [6].