Choosing where and how to manage deposit funds is a crucial decision for leaders of faith-based organizations. If a church’s bank fails, they aren’t just losing operating funds. They’re losing money that may be earmarked for charitable work and other vital initiatives supported — and largely funded — by their congregation.
These institutions often must handle significant amounts of cash from donors and members. Managing these cash deposits efficiently and responsibly is paramount to ensuring the organization’s financial stability.
Moreover, because they are handling funds entrusted to them by their members, faith-based organizations need to be responsible stewards of those funds or they risk losing the trust of their congregants.
Most people in organizational leadership understand that vetting banking partners is extremely important, especially in the wake of 2023’s bank failures.
What they may not know is that looking beyond a traditional banking relationship — working with only one banking partner — creates opportunities to help secure, manage, and grow their funds.
Treasury Management Strategies Expand Opportunities
One major banking opportunity for churches is implementing a treasury management strategy. A treasury management strategy can help churches take control of their cash deposits and open doors to additional financial services that are able to support their mission and growth initiatives.
This is especially true when they partner with experienced deposit management experts who can tailor strategies to fit the needs of a particular faith-based organization.
Risk Mitigation
Depositing funds into an account at a FDIC-member institution can offer security for a church’s cash, up to a point. Funds up to $250k per account per institution are insured by the FDIC.
However, anything over that amount in a single account is at risk. A treasury management strategy that places funds in excess of $250k in accounts at other trusted institutions can help protect more funds and mitigate the risk of loss.
Long-Term Sustainability
Sustainable financial practices are foundational to the long-term viability and impact of churches. By effectively managing cash deposits, churches can maintain financial stability, build reserves for future needs, and be in a better position to navigate economic uncertainties.
Using a partner can be an excellent opportunity for faith-based organizations looking to grow their cash deposits. They are committed to helping churches find the best rates possible for their cash deposits.
Operational Efficiency
Efficient management of deposits enables churches to optimize operations and reduce administrative burdens. That frees up valuable time and resources for mission-driven activities.
Compliance and Regulatory Requirements
Proper deposit management ensures compliance with financial regulations, tax laws, and reporting requirements, shielding churches from potential legal liabilities and penalties.
Transparency and Accountability
Transparent financial practices are vital for maintaining trust and credibility within the congregation and the broader community. A deposit management strategy offers churches transparent reporting and accountability to stakeholders.
Mission-Aligned Banking
Another opportunity that’s especially appealing to faith-based organizations is depositing funds with banking partners that align with the organization’s mission and values.
For instance, a church may not be comfortable with their deposited funds being used to support industries that aren’t in tune with their beliefs. They may want to deposit their cash with institutions that actively support industries and causes the church and its congregation cares about.
Churches and faith-based organizations that take advantage of the banking opportunities available to them are taking a critical step in protecting their funds, and they are living up to the promise they make to their members to be good stewards of their donations.
This information is courtesy of Ampersand, which offers deposit management services, www.trustampersand.com. With Ampersand faith deposit solutions, faith-based organizations can be sure their deposits are both fiscally responsible and aligned with their values.
