The banking news over the last several days has given many of us flashbacks to the financial crisis of 2008.  As we listen to the reports of the Federal Deposit Insurance Corporation (FDIC) seizing the assets of two large banks,  we are concerned about protecting the resources God has provided for our organization to do its vital ministry work. Let’s use this time to step back and review two action items we can take as a part of our ongoing financial practices that can help protect our ministry going forward.

First, evaluate and monitor the financial health of your bank.  One way to do this is by using an independent bank rating system like Bauer Financial, which uses a 5 star rating system for banks and credit unions.  While many of us may have long-term and friendly relationships with our local bank partners, it is good to review independent, outside resources that will provide an unbiased view of the bank’s strength. With this information, you will have key data that will allow you to ask your bank the “tough” questions to determine if changes are needed.

Second, remember the importance of the required financial statement disclosure regarding cash deposits in excess of FDIC insurance. FDIC insurance typically insures bank accounts at a limit of $250,000 of coverage per depositor, per the bank. For credit unions, deposit insurance is provided by the National Credit Union Administration (NCUA) in the amount of $250,00 for single ownership accounts.  If you have significant cash deposits, you may want to work with your financial advisors to determine strategies you can use to protect your ministry from loss associated with a bank failure. One option may be asking your bank if it is part of the IntraFi network. This is a service that provides options such as Certificate of Deposit Account Registry Services (CDARS) that will allow you to spread your deposits among several banks, keeping accounts balances below the FDIC limits while having just one bank as your point of contact. You may also want to work with your financial advisor to explore other short-term investment options for excess cash.

As a church or ministry trying to navigate these uncertain financial times, it is important to protect your financial cash assets and to monitor the financial health of your banking partners. Your CPA firm and your financial advisors are good resources to help the ministry develop sound financial strategies to achieve these priorities.

For more news affecting your ministry, go to ECFA’s collection of recent articles at ECFA.org/news.