Nonprofit organizations often face the fortunate dilemma of having excess cash not needed for current operations but may not be suitable for long-term investing. A conservative strategy to take advantage of low-risk investments that offer yield on your cash may be worth considering. 

How Can My Nonprofit Benefit From a Cash Management Program?‍

An organization with substantial cash in a low-yielding account that isn't needed immediately should explore responsible investment options to prevent the erosion of its purchasing power.

From a fiduciary perspective, efficiently allocating cash helps the decision-makers demonstrate responsible stewardship of the organization’s assets.

Here are a few areas to consider putting your cash to better use:

‍High Checking Account Balance

‍After you’ve developed a comfortable 3-6 month operating expense cushion, extra cash in a near zero-returning checking account can be invested with a short-term, low-risk strategy.

Grant Funds Not Yet Spent

‍Organizations that steward grants may have an opportunity, if allowed by the grantor,  to invest that grant money and use the income earned on operating expenses.

‍‍‍‍Low-Yielding Money Market Funds

If you hold large balances in money market funds that offer minimal yields, reinvesting in short-term Treasuries is a conservative, low-risk alternative.‍

What Should You Look for in a Short-Term Cash Investment Program?‍

Stability

Unlike longer-term investments, such as stocks and certain bonds subject to fluctuations, short-term investments tend to hold their value relatively steady.

Liquidity

A good short-term investment typically offers high liquidity, so you can withdraw your cash quickly when you need it.

Affordability

Unlike more complex investment instruments, a short-term investment should be inexpensive to buy or sell.

How Does eCIO’s Cash Management Program Work?‍

Our experienced team of nonprofit investment advisors works with your finance committee or oversight group to evaluate whether and how much of your organization’s cash may be prudently invested to achieve income and growth. We build and manage a cash portfolio that may include a Treasury ladder strategy with a time horizon that matches your cash needs.

US Treasuries are government-backed, low-risk securities that can be easily bought and sold and offer yields that help defend against inflation.

Our cash management program offers:

Easy Onboarding

‍Setup of your account takes a few days

Cash Access

Your investment account can be linked to your checking account for easy transfers

Detailed Reporting

‍Daily view of your account balance and quarterly reporting on your portfolio

Oversight Portal

‍A dedicated portal for your organization so you have complete visibility into your investment program and regular interactions with eCIO

Ongoing Advice

‍eCIO’s advisor team is readily accessible and proactively communicates with your oversight group

Low Costs

‍A transparent, single fee for all cash management services*

For cash you may need in the next several years, investing in a short-term Treasury ladder offers stability, liquidity, and low transaction costs. It provides a return well above what you get in a checking account.

Reach out to the eCIO team for more information.

*Minimum cash management account value is $1 million. Annual fee starts at 0.25%, with a minimum annual fee of $5,000.