What a reserve is for

One of my favorite hometown nonprofits is Sidewalk, the film center and cinema in Birmingham. My family loves going to movies there, especially the pajama-party screenings on Saturday and Sunday mornings, where they show family-friendly films. And my wife and I went to opening night of the 28th annual Sidewalk Film Festival a few weeks ago, one of our favorite local events of the year. It got me thinking — what do Sidewalk's 990 filings look like?

Not what I expected, at the start. From 2010 through 2016, Sidewalk closed every single year owing more than it owned — seven years running with the balance sheet underwater. Never dramatically: about $50,000 in the red at the beginning of that stretch, about $54,000 at the end of it. But not once above zero. Then 2017 turned. Revenue more than doubled, the organization finished a year in the black for the first time, and it kept going — by 2020 there was $2.55 million on the books, more than two years of running costs with no money coming in at all.

Since 2021 that cushion has been shrinking: $2.6 million down to $1.6 million, roughly a million over three years. Back in July I called reserves draining year after year a warning sign — but that warning was about an organization down under two months and still falling, where one lost grant would have finished it. Sidewalk is at about eleven months, on roughly $1.7 million a year, down from more than two years' worth at the top. It built a cushion, and now it's using it. That's what it's for.

Two things I can't see and won't pretend to: 2013 is missing from our copy of the record, and in one year the revenue breakdown doesn't add up, so all of the above reads only the totals — money in, money out, what's left. That's enough for the shape. Do you have a favorite local nonprofit you're curious about? Reply and tell me — I'll look it up.