Families with significant wealth have distinct financial objectives and aspirations as they seek to manage and grow their assets. Preserving generational wealth, keeping family businesses profitable, and serving others are often key priorities for family office financial advisors. Philanthropic and community focused programs and projects are often part of long-term giving strategies, with large amounts of capital being allocated to charitable organizations, universities, and nonprofits.
Rethinking their cash management strategy can help find new ways to accelerate impact, and preserve family legacies for generations to come.
First, it’s important to ensure that all cash deposits are protected by deposit insurance through a network of banks, rather than remaining in one institution which would create a concentration risk. Deposits are only protected by the FDIC up to $250,000 per tax ID, per insured financial institution in the event an insured bank fails. Keeping funds safe is a key part of a comprehensive cash management strategy. This is something that can be done manually via a treasury management department, or can be outsourced to a partner like Ampersand, where we deposit client funds with our financial institution partners. The financial institutions in our network are rigorously screened, and adhere to our stringent underwriting standards.
Secondly, much like choosing to shop with a clothing company that prioritizes sustainable manufacturing or purchasing fair-trade coffee, choosing the right banking partner is an important part of living your values and maximizing the impact of your cash. Family offices can work with banks that share their values, ensuring that their deposits support initiatives they care about. By aligning banking choices with philanthropic goals, family offices can amplify their positive impact on society. Reviewing impact reporting is a great place to start, as well as prioritizing working with community banks, community development financial institutions, and minority depository institutions.
Finally and most importantly, earning competitive returns on cash deposits means you can reallocate those returns to fund new initiatives or make a deeper investment in the ones you care most about. By optimizing cash management strategies to achieve higher yields, family offices can generate additional funds for charitable giving. These extra resources can be used to support innovative projects, expand existing programs, and address urgent community needs more effectively.
The Ampersand Impact Allocation Account is a turn-key solution that creates a supplemental account funded by interest earnings. These funds are deployed at the direction of our family office clients to organizations they support.
Learn how Ampersand can help your family office with deposit management strategies. Contact Ampersand to get started.
