Statement of Financial Polices

This policy statement is intended to set forth the principles applied by the World Union in utilizing funds received from donors.

1. Contributions made to the World Union which do not specify a particular program or purpose (e.g., a contribution made generally to the World Union) may be used by the World Union for any purpose consistent with its mission.
2. Subject to paragraph 5 below, contributions earmarked by a donor for a specific program of the World Union may only be used for that program and for no other purpose.
3. Subject to paragraph 5 below, contributions earmarked by a donor for a specific purpose of the World Union (e.g., for the former Soviet Union, for Israel) but which do not designate a specific program may be used by the World Union only for the specific purpose identified by the donor (e.g., a donation designated for use in the former Soviet Union may be used only to support the programs of the World Union in the former Soviet Union), although the World Union may apply its own judgment in determining how the funds should be expended.
4. The World Union prepares and the Executive Committee approves an annual budget of anticipated revenues and expenses; however, the flow of actual cash receipts are uneven and based on donor considerations or the occurrence of specific fundraising events. As a result, the World Union operates at a cash deficit for certain months of the year but on a cash flow positive basis for other months. In order to better manage its cash flows, the World Union applies the following policies:
   1. The Management Committee monitors monthly the cash receipts against the anticipated revenue for the month and the year to date period. If revenues are below budgeted amounts, the committee undertakes a review of all expenses which require cash to determine which expenses that can be reduced or eliminated in order to reduce the projected cash flow deficit
   2. The World Union may engage in short-term borrowing designed to provide cash to cover short-term cash shortfalls as contained in cash flow projections approved by the Management Committee. Any such borrowing shall be subject to the following guidelines:
   3. On a fiscal year basis, such borrowing shall be permitted for budgeted monthly cash shortfalls in order to meet prospective obligations.
   4. Any such borrowing shall be accompanied by a plan for the prompt repayment of the obligation within that fiscal year. It is intended that the World Union apply all designated funds towards their designation within the fiscal year that they were intended for, and not maintain outstanding debt balance arising from borrowings permitted by subparagraph (i).
   5. During the period that any such borrowing obligation is outstanding, the World Union shall not undertake new programs from undesignated funds or hire additional staff without due consideration being given to the repayment of such borrowing obligation.
   6. Borrowings permitted by subparagraph (i) may need to be collateralized by assets of the World Union if commercial in nature. Any such agreement shall provide for the prompt release of such collateral by the lender upon repayment of the obligation.
5. If approved in advance by the Management Committee, the World Union may use any cash on hand to pay pending bills where such payment is required to fund existing commitments of the World Union and if such payment is necessary to avoid serious adverse consequences to programs. Any approval of the foregoing use of such cash by the Management Committee shall include a plan for the replenishment or repayment of such cash.
6. The foregoing financial policies of the World Union shall be disclosed to donors and prospective donors in appropriate publications of the World Union.