A nonprofits board of directors has the ultimate say as to where cash assets will be deposited and as such they should not only have a committee to handle the issue, they should also have a banking policy and clarify who acts as liaison to the bank. It is prudent to require more than one signature on a check for example.
The Slideshare presentation above is a short primer on selecting a bank for a nonprofit.
Everbank is a local bank here in Jacksonville that markets themselves as nonprofit friendly. Part of their nonprofit services include:
- Pay no monthly account fees with an average minimum monthly balance of $3,000 or pay only a $14.95 monthly fee.
- Open an account with as little as $1,500.
- Choice of business online banking solutions.
- Optional Online Bill Pay and bill presentment.
- No minimum balance needed to earn interest.
- Avoid the hassles of overdrawing with Overdraft Protection (subject to credit approval).
All of the above can add up. Shopping around is important in narrow funding environments like the one we are in now.
There is a perception in most communities that nonprofits do not borrow from a bank and that all their funds are either donated, granted or earned. Nonprofits operate a lot like for profit businesses and need a line of credit or a loan for capital projects. Once again it is up to the board as representatives of the community stakeholders to monitor and make prudent banking decisions based on staff recommendations.
One of the most overlooked nonprofit banking elements is not creating a relationship with a bank representative. The more they understand your mission, programs, impact and financial policy, the more likely you will be able to borrrow as needed. Let us not downplay a supportative bank from a fundraising and sponsorship perspective as well. The bank may be looking for an opportunity to show social investment. A relationship can make all the difference.
Banks can be a great friend to nonprofits if they are chosen wisely.