Most nonprofit leaders don’t spend much time thinking about their bank and that’s usually a good thing. If payroll is processed, donations are deposited, and bills are paid on time, banking tends to fade into the background. But every so often, it’s worth stepping back and asking a simple yet important question: Is our bank helping us move our mission forward, or is it simply where we keep our money?
Many nonprofit banking relationships have been in place for years. Sometimes they’re simply inherited from a previous executive director or finance leader. Sometimes changing banks feels too disruptive to even consider undertaking, but many times there’s never been a reason to look at other options. If things are working, why change it?
Do You Have Someone Who Knows Your Organization?
Think about the last time you needed your bank. Maybe it was an unexpected wire transfer, a question from your auditor, or a suspicious transaction that needed immediate attention. Did you have a banker who knew you and your organization? Or did you find yourself explaining your situation to someone new?
A strong banking relationship isn’t built around products. The relationship is built around people. Having a banker who understands your mission, your funding cycles, and the way your organization operates can make all the difference when something unexpected comes up.
Does Your Bank Understand How Nonprofits Operate?
Nonprofits face financial challenges that don’t always fit the traditional business model. For example, grant reimbursements don’t always arrive on schedule, donations often fluctuate throughout the year, restricted funds require careful oversight, and finance committees expect clear reporting with strong internal controls. A banking partner who works with nonprofit organizations understands these realities and can recommend tools and services that align with the way you actually operate as opposed to the way a typical business does.
Are You Confident You’re Protected Against Fraud?
Fraud has become one of the biggest financial risks facing nonprofit organizations. Criminals know nonprofits often have limited staff and smaller accounting teams which can make them targets.
There are many fraud mitigation tools that are readily available such as Positive Pay, ACH filters, dual approvals, account alerts, and user permissions. Is your organization taking full advantage of these? A proactive banking partner should discuss best practices before they become costly problems.
Is Your Bank Bringing Value Beyond Your Checking Account?
The strongest banking relationships are measured beyond transactions. They’re measured by the conversations you have such as sharing ideas that could improve your cash flow and providing educational resources and fraud updates. Additionally, a strong banking relationship can connect you with other nonprofit leaders, specialists, and community partners.
A good bank manages transactions; a great banking partner helps your organization operate more effectively and move its mission forward.
When Was the Last Time You Evaluated Your Banking Relationship?
Most boards regularly review investments, insurance coverage, audits, and other professional services. Banking relationships, however, often stay in place for years without much discussion.
Conducting a banking review doesn’t mean you’re looking to make a change. It simply gives your organization the opportunity to ask whether your current services, technology, and support still match the needs you have today, not the needs you had five or ten years ago.
Here’s one question worth bringing to your next finance committee meeting:
If we were choosing a banking partner for the first time today, would we make the same decision?
If that question gives you pause, it may be time for a conversation. Sometimes the greatest value comes from discovering what a stronger banking relationship could mean for your mission.
