BROWSE

War Chest

Definition

The Community Chests in the United States and Canada were fund-raising organizations that collected money from local businesses and workers and distributed it to community projects. The first Community Chest, "Community Fund", was founded in 1913 in Cleveland, Ohio by the Federation for Charity and Philanthropy. The number of Community Chest organizations increased from 39 to 353 between 1919 and 1929, and surpassed 1,000 by 1948. By 1963, and after several name changes, the term "United Way" was adopted in the United States, whereas the United Way/Centraide name was not adopted in Canada until 1973–74.

What is 'War Chest'

A colloquial term for the reserves of cash set aside or built up by a company to take advantage of an unexpected opportunity. While a war chest is typically used for acquisitions of other companies or businesses, it can also be used as a buffer against adverse events during uncertain times. A war chest is often invested in liquid short-term investments, such as treasury bills and bank deposits, which can be accessed on demand.

Explaining 'War Chest'

A war chest that has swelled up too much can sometimes be viewed as an inefficient way of deploying capital. While investors may be willing to give a company with a huge cash hoard the benefit of the doubt for some time, if the cash balance continues to grow well beyond the company's normal operating requirements, its investors may clamor for a share of it.


If the company is unable to deploy its war chest efficiently, it may consider distributing part of its cash holdings to its shareholders. Such return of capital to shareholders is usually achieved either through a special dividend distribution, an increase in the regular dividend, a share buyback or a combination of these measures.


Further Reading


Sudden stop, financial factors and economic collpase in Latin America: learning from Argentina and Chile
www.nber.org [PDF]
AFTER CLOSE to two decades of neglect, battling the HIV/AIDS epidemic has become one of the highest priorities on the global agenda. UNAIDS estimates that some 40 million people are living with HIV—25 million of them in sub-Saharan Africa and 8 million in Asia …

Campaign war chests as a barrier to entry in congressional racesCampaign war chests as a barrier to entry in congressional races
onlinelibrary.wiley.com [PDF]
AFTER CLOSE to two decades of neglect, battling the HIV/AIDS epidemic has become one of the highest priorities on the global agenda. UNAIDS estimates that some 40 million people are living with HIV—25 million of them in sub-Saharan Africa and 8 million in Asia …

Putin's economic record: Is the oil boom sustainable?Putin's economic record: Is the oil boom sustainable?
www.tandfonline.com [PDF]
AFTER CLOSE to two decades of neglect, battling the HIV/AIDS epidemic has become one of the highest priorities on the global agenda. UNAIDS estimates that some 40 million people are living with HIV—25 million of them in sub-Saharan Africa and 8 million in Asia …

War chests as precautionary savingsWar chests as precautionary savings
link.springer.com [PDF]
AFTER CLOSE to two decades of neglect, battling the HIV/AIDS epidemic has become one of the highest priorities on the global agenda. UNAIDS estimates that some 40 million people are living with HIV—25 million of them in sub-Saharan Africa and 8 million in Asia …

Political instability and economic vulnerabilityPolitical instability and economic vulnerability
onlinelibrary.wiley.com [PDF]
AFTER CLOSE to two decades of neglect, battling the HIV/AIDS epidemic has become one of the highest priorities on the global agenda. UNAIDS estimates that some 40 million people are living with HIV—25 million of them in sub-Saharan Africa and 8 million in Asia …

How “new” are “new wars”? Global economic change and the study of civil warHow “new” are “new wars”? Global economic change and the study of civil war
brill.com [PDF]
AFTER CLOSE to two decades of neglect, battling the HIV/AIDS epidemic has become one of the highest priorities on the global agenda. UNAIDS estimates that some 40 million people are living with HIV—25 million of them in sub-Saharan Africa and 8 million in Asia …


Leave a Reply

Your email address will not be published. Required fields are marked *