Every church struggles to make the most out of the funds they raise. They work to stretch every dollar in support of the overarching mission. Part of that involves managing how they spend their money, but another is about what they do with the money that isn’t spent.
Some church organizations want to keep those funds liquid and, in the process, leave them sitting idle. But there are two big problems with that: For one, you put those funds at risk if they’re not secured by FDIC or NCUA insurance. And two, you miss out on interest-related gains and the opportunity to make your donations go further for your organization.
The solution: deposit management.
How deposit management can help
Churches, much like businesses, like to keep extra cash on hand in case of unforeseen expenses or emergencies. It’s a hedge against the costly events that can come your way in the course of a given month or quarter.
Many church leaders choose to let that extra cash sit idle, and we understand. After all, you’ve done the hard work of gathering the donations, and you may not want to lock your money away in investments that are sometimes difficult to unwind once the money is needed. What you may not know about is the easy way to make that money work for you, while keeping it safe and available for you when you need it.
That’s where deposit management comes in. Deposit management serves two primary functions: First, with the right partner, deposit management services allow you to secure FDIC / NCUA insurance for every last dollar you have on hand. Here at American Deposit Management, we can secure FDIC / NCUA insurance for sums in excess of $75 million by spreading your church deposits around to different financial institutions. If you rely on a traditional bank, you would only be eligible to have $250,000 of your church’s cash covered by a single bank.
The second function concerns earning money on the funds you already have. At ADM, we’ve built a robust network containing hundreds of banks and credit unions located around the country. These relationships allow us to provide those banks with much needed deposits, and in turn, we get access to nationally competitive rates for our clients’ deposits.
At the end of the day, your cash stays safe and liquid, while it earns interest. And suddenly, you’ve grown your pool of excess funds without raising money or cutting budgets.
Vendor payment processing can play an important role in managing religious funds
A big reason why churches keep extra cash on hand is to pay bills when they come due. And we agree: Preparation is key to financial security and success.
But there’s a better way to cover vendor-related expenses than to stockpile cash reserves. Instead, consider a system that automates payments to your church’s vendors. This type of fintech ensures payments are made accurately and on time by a third party, which not only streamlines the disbursement process but also eliminates some of the potential for fraud and theft.
When your vendor payments are set up for success, you can focus your efforts on other things — and put your excess cash to work in other, more productive ways.