The last few days have been and continue to be uncertain and highly volatile within the U.S. banking industry.
The good news is that our clients do not hold any direct exposure through Infinite Giving to the current banking crisis with Silicon Valley Bank, Signature Bank, and Silvergate Bank. As we continue to work through recovery, it brings to the forefront the importance of healthy banking and financial practices.
Nonprofit organizations play a critical role in society, addressing a wide range of social, environmental, and economic issues. However, managing a nonprofit can be challenging, and financial management is one of the most critical components of nonprofit success.
Banks can be key partners in nonprofit financial management, providing a wide range of services and support. However, it's essential that nonprofits take a proactive approach to their banking relationships and practices, ensuring that they prioritize healthy banking to support their mission and long-term sustainability.
So here are 3 strategies to develop nonprofit banking health:
1. Diversify your holdings.
As we have seen firsthand this week, banks can fail. Reduce your risk by diversifying your assets. Best practices include leveraging at least two different banks as well as purchasing treasuries and securities for holdings with a nonprofit investment advisor.
2. Choose a Bank with a FDIC Sweep Program.
$250,000 FDIC insurance is not always enough. Ask your bank for a sweep program that can insure your funds up to a greater amount. If your bank does not offer a FDIC sweep program, Infinite Giving accounts provide FDIC sweep up to $1,250,000.
3. Treasury Bills:
Our clients consistently choose short term T-Bills for their reserves for a reason. Not only are the current rates often higher than savings, CDs, and money markets, but your banking risk is reduced with T-Bills. T-Bills are highly liquid and are backed by the full faith and credit of the US Government (the one who prints the money).
As always, Infinite Giving is here to serve you as you seek financial sustainability, navigate difficult circumstances, and seek investment guidance.
Apply for a Treasury Account today to get started.