There is always a flight to financial safety when there is an uncertain economy. With interest rates driving higher and the stock market looking like a bad electrocardiogram, many nonprofit managers are relying more on the local bank. You must be able to have answers for these five questions:
Is The Bank Secure?
Too big to fail is not always the case. Banks fail all the time. Nonprofits managers are asking questions about a bank’s financial security since the economic downturn. Ensuring that the bank is strong and checking for Federal Depositors Insurance Corporation (FDIC) insurance isn’t being pushy. It’s doing your due diligence to make sure your funds are protected.
How Will The Bank Partner With Your NPO?
A bank shouldn’t just be an institution where you store your money. Your organization deserves a partner. A banker should never be too busy for you. Walk away if you try to make an appointment and believe you aren’t given time and sound advice.
What Does The Bank Do Within The Community?
You should ask about partnerships with the larger community. Thing about people, the planet and profit. Finding a bank that incorporates your mission values, such as sustainability or community objectives, with secure financial strategies would be a win-win.
How Can Exchange Rates Impact Your Work?
Many nonprofit managers are looking beyond their own backyards to make the world a better place. With these global missions comes the need to understand how currency will impact the work. Currencies are ever fluctuating based on global markets. It doesn’t matter whether you work in areas that use the dollar or the Tanzanian shilling. Currency is a moving target. It would also be prudent to know what the historical range of the currency is against the dollar.
What You Should Know About Lines Of Credit?
Lines of credit should be used for temporary timing differences in the borrower’s cash cycle. If you receive payments monthly, as one would in a point of service nonprofit, and you have payroll twice per month, then you should I would need a line approximate to half of you monthly budget.
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