The importance of aligning financial strategies with core values has never been more crucial. Customers are increasingly demanding that corporations live their values in all areas of business operations, and non-profits are expected to make more impact with a lower supply of donor funds due to a challenging economic climate. For corporate financial executives, family office CFOs, and non-profit finance managers, leveraging deposit management strategies can serve as a powerful lever to accelerate their impact on the community without negatively impacting the bottom line.

The Role of Cash Management in Financial Strategy

Cash management is a fundamental aspect of any financial strategy, but its potential to drive positive community impact is often overlooked. By strategically placing cash deposits with institutions that align with your organization's values, you can support and amplify causes that matter to you. Moreover, cash management can be used as a tool to generate additional revenue via interest, allowing organizations to support key initiatives to a greater extent. 

Aligning Deposits with Values

One of the most effective ways to align your financial strategy with your values is by depositing funds with Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), and other banks that share your mission. These institutions are committed to serving underserved communities and promoting economic development in areas that need it most.

For example, a climate-focused non-profit would likely prefer not to bank with institutions heavily invested in the oil and gas industry. Instead, they could choose a financial institution with a more climate-friendly portfolio. This choice not only aligns with their mission but also ensures their funds are being used in ways that support their broader goals.

Leveraging Cash Management for Impact

Here are some strategies to consider when managing your deposits for greater impact:

1. Research and Choose Aligned Institutions: Start by identifying banks and financial institutions that align with your values. Look into their investment portfolios, community initiatives, and overall mission.
2. Diversify Deposits: Spread your deposits across multiple aligned, FDIC member institutions to support a broader range of initiatives. This diversification can also reduce risk and provide greater financial stability.
3. Engage with Institutions: Build relationships with your chosen banks and engage in dialogue about how they can further align with your mission. This can lead to more tailored financial products and services that meet your needs.
4. Monitor and Adjust: Regularly review the impact of your deposits and adjust your strategy as needed. Stay informed about the activities and changes within the institutions you support to ensure continued alignment.

Real-World Examples

Many organizations are already successfully using deposit management strategies to further their impact:

• Corporate Executives: A corporation focused on social responsibility may choose to bank with institutions that support small businesses and entrepreneurship in low-income communities.
• Family Offices: A family office dedicated to environmental sustainability might deposit funds with green banks that finance renewable energy projects.
• Non-Profits: A non-profit organization working on social justice issues could support MDIs that provide financial services to minority communities.

Cash Management Strategies can Make a Difference

By understanding and utilizing cash management as a strategic lever, financial decision-makers can significantly enhance their positive impact on the community. Aligning deposits with values not only supports important causes but also reinforces the mission and goals of your organization. Now more than ever, it's crucial to leverage every available tool to drive meaningful change, and strategic cash management is a powerful way to do that.

Learn how Ampersand can help your organization with deposit management strategies. Contact Ampersand