Nonprofit boards have a fiduciary responsibility to protect the funds they have raised and use them for the organization’s best interest. However, securing FDIC coverage for your nonprofit’s funding can be complicated or insufficient. Many organizations hold five or more bank accounts just to ensure no account exceeds the standard $250k FDIC coverage limit, which creates unnecessary administrative complexity and drains staff time.

A sweep program may help to alleviate these issues if more of your funds are backed by the U.S. government. 

However, most banks only offer these programs to businesses. Luckily, Infinite Giving offers a nonprofit sweep program that provides our clients with FDIC coverage up to $5M in one account. To learn more about FDIC sweep programs and how your nonprofit can take steps to insure your funds, read on.

What is an FDIC sweep program?

An insured deposit program for cash, also known as an FDIC sweep program, is a liquid alternative overnight investment.

This program leverages expanded FDIC insurance coverage, a feature that other accounts, like money market funds, cannot provide. With a sweep program, you can earn interest on idle cash balances and manage risk with FDIC insurance while providing banks an attractive, more diversified source of funding and liquidity.

Do nonprofits have access to FDIC sweep programs?

Although small to mid-size nonprofits historically haven’t had access to FDIC sweep programs, Infinite Giving is proud to offer a nonprofit sweep program that provides our clients with FDIC coverage up to $5M in cash through a single account. These sweep accounts can streamline cash management, increase transparency and access, and potentially improve your yields. 

What is the difference between a standard nonprofit bank account and a brokerage account with a sweep program?

Standard nonprofit bank accounts only offer up to $250,000 in coverage across all types of accounts if the bank fails. Brokerage accounts with sweep programs can offer FDIC coverage for nonprofits up to $5M from one account. 

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Keeping your reserve funds in a brokerage account also provides additional benefits like allowing you to invest your reserve funds, process stock donations, and ultimately support your financial sustainability by streamlining your financial management.

What happens to nonprofit funds that exceed the standard $250,000 limit?

Funds exceeding the standard $250,000 FDIC coverage threshold in a standard bank account are uninsured, exposing your organization to potential financial risk if the bank were to fail. For nonprofits with hundreds of thousands or millions of dollars in reserve funds, this could mean uninsured amounts may be at risk.

To protect these funds, organizations have historically had to implement manual administrative workarounds. By using a brokerage account with an FDIC sweep program, however, you can insure up to $5M from one account.

How long does it take to set up a brokerage account with a sweep program?

Traditionally, opening a brokerage account has taken up days or even weeks of nonprofits’ time, but with Infinite Giving, organizations can initiate the application and account opening process in about 20 minutes. This means you can spend less time worrying about financial management and get back to what really matters: your mission.

How could a sweep program fit into a nonprofit's investment policy?

Incorporating a sweep program into an investment policy allows your organization to prioritize capital preservation and liquidity alongside potential yield. Because these networks automatically allocate excess cash to a roster of partner banks, they offer a structured way to manage your assets and maintain FDIC coverage without constant manual oversight.

Updating your investment policy to include this cash management strategy shows a proactive commitment to safeguarding donor funds while earning a competitive return on idle cash.

How does Infinite Giving offer more than the FDIC bank standard of $250,000?

We sweep your reserve deposits to partner banks through a brokerage account, each one FDIC-insured. As a result, you can access 20x* the FDIC coverage you'd typically get at a bank. An FDIC sweep program is a common business practice, but Infinite Giving is the only firm to offer these accounts exclusively to U.S.-based nonprofit clients.

A nonprofit's portfolio can include multiple accounts for cash management depending on its time horizons, risk appetite, and liquidity needs. For example, a nonprofit portfolio of $10 million or more in cash can have different investment accounts for its Operating Reserves, Short, Mid-, and Long-term investments. 

At Infinite Giving, we take the responsibility to keep your money safe very seriously. We’re proud to offer far more FDIC insurance than a regular savings account and competitive rates for nonprofit clients. This low-risk, high-liquidity strategy can help to promote stronger financial sustainability for your organization.

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*DISCLOSURE

Infinite Giving Advisory Services, Inc. is an SEC registered investment adviser. Advisory services are only offered to clients or prospective clients where Infinite Giving Advisory Services, Inc. and its representatives are properly licensed or exempt from licensure. This content is solely for informational purposes. Past performance is no guarantee of future returns.

FDIC coverage is subject to FDIC rules and aggregation across accounts/ownership categories and depends on program bank availability.

Investors’ experiences may vary from the content. Nothing in this presentation constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Infinite Giving manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary.

Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption. Investing involves risk and possible loss of principal capital. No advice may be rendered by Infinite Giving Advisory Services, Inc. unless a client service agreement is in place. Donation services provided by Infinite Giving Technologies, Inc.

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