Insights: Optimizing Your Nonprofit’s Banking Relationship

In this installment of Insights, NPN President Laura Parrow provides tips on on how nonprofits can more effectively leverage their banking relationships to support their needs.

Most nonprofits today depend on grants, government support, and donations to fund their programs and operations. Your bank can serve as a key partner in helping you maximize these resources.  Drawing from over thirty years of experience in banking — especially in financial services product management — I’d like to offer actionable guidance for nonprofits aiming to make the most of their banking relationships and financial resources.

Put Your Cash Work for You

First, explore options such as high-yield savings or money market accounts to ensure that your cash are earning as much as possible for your organization. Automated sweep services can also be beneficial, automatically moving surplus cash into accounts with better returns and sometimes providing expanded FDIC coverage.

Streamline Money Management

To boost efficiency, inquire about your bank’s online and mobile banking platforms. These often include built-in cash flow and budgeting tools, which are especially helpful for smaller organizations. Remote deposit capture can simplify your check processing and may come with free equipment or introductory deals. For electronic payments, ask about merchant services that allow you to accept card payments; nonprofits may qualify for special rates or discounts by going through their bank.

Managing expenses is just as crucial. Many banks provide online bill pay, Automated Clearing House (ACH) origination, and wire transfer services, making it easier to pay vendors, staff, and other partners securely and on time. Some institutions offer nonprofit banking programs with reduced or waived fees for these core services.

Explore Credit Options

Don’t overlook credit opportunities. Banks often have lending programs designed to support nonprofits, so be sure to consult with your banking relationship manager to explore options that can help you achieve your goals. Credit opportunities may include specialized loans for working capital, equipment, or facility projects, such as bridge loans, lines of credit, and term loans, often designed to manage cash flow gaps.

Tips for Getting the Most Out of Your Banking Partnership

• Always ask about discounts or programs specific to nonprofits.

• Build a strong relationship with your banker. They can help you find the best products and advocate for your needs.

• Review your financial services annually to ensure you’re utilizing the most effective and affordable options.

By taking the time to understand and leverage the right banking solutions, your nonprofit can streamline operations, save money, and dedicate more resources to fulfilling your mission.