An official Cochrane policy. First approved (and last updated) 15 December 2020

Cochrane’s financial resources exist to help the organization achieve its Mission ‘to inform health decision making by producing trusted and timely synthesized evidence, making it accessible and advocating for its use’. The charity holds financial reserves for three main purposes:

1. To protect the continuity of its work against uncertain future income streams (Fund A);
2. To fund and support specific projects in strategically important areas defined by its Strategic Plan (Fund B); and
3. To meet its present and future operational needs (Fund C).

The major risk exposure in Cochrane’s income portfolio is its dependence on publishing income from royalties received from sales of the Cochrane Library, which represents approximately 90% of annual turnover. Cochrane’s long-term ambition is to make all Cochrane Reviews Open Access ‘immediately upon publication’ but it will be implemented only when the Board are confident that doing so will not undermine Cochrane’s future financial sustainability and, therefore, its ability to meet other strategic goals. Nevertheless, a portion of Cochrane’s Reserves will be specifically designated as a ‘Continuity Fund’ (Fund A) to mitigate this risk and help provide financial stability through a post Cochrane Review Open Access transition period. The Continuity Fund is designed to support Cochrane complete any adjustments required in this period, should future publishing incomes be significantly reduced.

The Strategic Investment Fund (Fund B) will be allocated to specific single- or multi-year strategic or change projects of organization-wide impact required to help Cochrane achieve its Strategic Plans and meet its organizational Mission. Proposals from the Senior Management Team to access and use Reserves from this Fund for strategic or change projects and initiatives must be approved by the Board [via the Finance, Audit and Investment Committee].

Cochrane holds reserves to ensure it can meet its operational needs and working capital requirements (‘Free Reserves’). The Free Reserves floor (Fund C) should not be less than three months’ sustainable operating costs, excluding any costs associated with our annual Colloquium, to provide operational cash flow.

Cochrane will also use its Reserves to generate additional income for the charity from a low-risk investment portfolio in accordance with the charity’s ethical values and independence, to meet a long-term investment target as set out in its Investment Policy established by Cochrane’s Governing Board. This Reserves Policy is approved by the Board and regularly reviewed and monitored by the Finance, Audit and Investment Committee. In the Board’s judgement, this allocation of Cochrane’s Reserves combined with an integrated strategic, risk management and financial reporting approach means that there will be sufficient resources to allow us to achieve our strategic goals and objectives in future while still being able to react flexibly to sudden financial needs or take advantage of other opportunities and challenges as they arise.