 I would like to welcome all of you for joining us for another episode of The Nonprofit Show. As you can see from the screen, this is a power week and we are thrilled to have William Schwab with us today, CPA and Philadelphia manager with your part-time controller. William is joining us today to talk about bankers in your boat and establishing banking relationships. So we are excited to have this conversation with you. We are also thrilled to have the continued support of our presenting sponsors. Many of these companies have been with us from the beginning almost 400 episodes now and they exist for one purpose and that purpose is to help you do more good. So they are in your community, many of them are virtual now of course and they really are here to help drive your mission forward including your part-time controller that joins us for this power week today. So thank you for that. And of course, thank you to Julia Patrick who has joined us as the CEO of the American Nonprofit Academy. If it weren't for Julia, we wouldn't be having this power week. Just like many of you, we thought this would last about a couple of weeks and here we are coming up on two years. I'm Jarrett Ransom. I get the great privilege to sit beside Julia and play this co-host and it's been such a great journey. I'm also known as the non-profit nerd CEO of the Raven Group and again this week it is dedicated very significant that every single episode is dedicated to your part-time controller. We're calling it power week. So hashtag power up and really looking forward to this conversation with you, William. I'd like to welcome you. Thank you so much. It is such a pleasure to be here and I know all of us at YPTC are so excited to be partnering with you for this week. Really, really looking forward to it. Jen's session yesterday was great. Spoiler alert, I think I'll probably have some carryover because we're talking about banking. So some of those fraud topics we touched on yesterday, they're connected to cash. So that ties right over into the relationships you have with your bankers and the services that your bank is providing to you. So I'm really glad you brought this up because I think in the non-profit sector a lot of times we think, oh, we don't need a banker. That's for profit. That's with lots of money. We're just like doing the minimum and we don't need this but I think that's just not true. Oh, yeah. I'd say it's absolutely not true. If anything probably non-profits have more of a need to have that relationship, that good, strong relationship with a banker, especially, let's think back over the events that have been unfolding over the past year and a half as we've dealt with COVID. So many of our clients were able to make use of PPP loans and where did you have to get a PPP loan? You had to go to a bank and if you didn't have kind of a contact or someone you could talk to at your bank, if you were just a random number calling in to a call center, you might have been left out in the cold in terms of trying to get in for some of the PPP funding. I think you are so right and you hit the nail on the head, William. We have talked so much over these now almost 400 episodes about the return on relationship and really the investment, we talk often and I'm sure you do too as being in the accounting industry, that return on investment but we rarely talk about that return on relationship and during such tumultuous times, really having that banker and a banking relationship helped so many of us, including the non-profit sector, small businesses, non-profit sector, really everyone and you're right, I mean really having that relationship because I went through those applications. I know Jennifer joined us, Jennifer Aliva joined us from YPTC often, often on Fridays as well as she was literally live getting the updates on her phone and there were so many changes. So tell us how do we go about finding a banker and what does that look like? Well, it can take a variety of forms and I think what I've seen for a lot of our clients and again, for the benefit of your audience, of course you know I'm one of our Philadelphia managers so I'm based here in Pennsylvania so I'm speaking to what I know some of my clients have experienced but I suspect the stories are the same throughout the country is a lot of what might have been smaller or community banks have gotten gobbled up over the years in terms of merger. So I know I speak for one client where they for years knew who the branch manager was in their office that was only a half a mile down the road from where my client was but then of course through a series of mergers and name changes all of those familiar faces disappeared. So we for this client in particular but I know a lot of my other clients and a lot of other YPTC clients as well have really looked to some of the community banks that still exist that are still out there. In many cases they are you know setting up you know nonprofit I'll call them practice line but nonprofit you know nonprofit service lines just to service the nonprofit sector. The client that I mentioned they're an animal rescue organization so they got connected with a community bank where it turns out the president of that bank shares those same passions and interests. So not only did they find a great business partner they also now found a great funding partner as well for someone who's going to support the mission volunteer at their events and and really just provide fantastic PR to the organization and I think those those are the success stories and they're definitely out there. So I have a one-on-one question I'm a little embarrassed to ask it is a community bank the same as a credit union or how do you define those two? They they are different and I don't again I'm not you know I'm not not a lawyer in that regards in terms of how the how the legal structure works but a credit union you know is typically set up you know they're kind of chartered differently in terms of how they're set up. A community bank generally is is going to be a business you know they're going to have shareholders whereas in a credit union the the owners are the members of that bank there are no external shareholders so that's that's the difference and I think that's why you see you know credit unions in that regard I think have have certainly become a lot more prevalent in recent years in the sense that you know they you know they they market that hey we're you know we don't have shareholders right we're looking out our members are shareholders we're looking out for them and putting their interests first. So that community bank is really vested in just that the community and so finding as you just said I would call it a success story this win-win of you know the leadership of the bank has a vested interest in this community solution then really fits that alignment when it comes to mission mission match as we call it and I think that really helps to build a very substantial relationship. It absolutely does and it builds those personal relationships too you know one you know I've asked my you know we're having these conversations with my clients you know a question that I will ask them sometimes you know especially if they're not happy with the service they're getting for their bank you know very often a question I'll ask them is well when's the last time your bank reached out to you you know do you have the branch managers phone number cell number you know who do you talk to you know when you call them are you talking to the same person or are you just a number in the queue and in their call center and and that's really the difference in terms of the service. So Bill I'm really curious like if we can find a bank and I'm all about the community bank I think that's such an important part of an actual societal structure within a community because those investments stay in our communities those those leaders know about the communities and sometimes they make decisions based on the relationships on what exactly what Jared said that return on relationship and not just a piece of paper so I think it goes deeper and I'll step off my soapbox to ask you this question when you talk about the service lines what is it that we should be looking for in terms of partnering or giving our business to a bank. Sure well I mean any you know any bank is probably going to have you know relatively you know similar services right but there definitely are some some specific ones that that you want to be on the lookout for and many of the ones I'm going to mention you know because for years we've always you know and this is something you know we've we've always you know preached to our staff here at YPTC it's like you know we're always we're always on the lookout for making recommendations to our clients you know we never want to rest on our laurels there's always ways that that we can improve and help our clients improve too so even before even before COVID and all of us working remotely you know we were always recommending to our clients you know be on the lookout for you know using you know if your bank offers some sort of remote deposit service take advantage to that so you're not wasting time driving back and forth to the bank branch you know those those checks come in you can essentially deposit them the the same day rather than keeping them in a drawer somewhere you know we've had new clients where we've walked into and they're like oh yeah here's our you know and you've got a month's worth of deposits and and heaven forbid cash that hasn't been deposited of you know so you know so certainly remote deposit is huge um online bill pay and that can take a variety of forms but certainly that's become critical um you know working working remotely um positive pay you know we talked you know Jennifer Aliva talked about uh you know some some fraud issues yesterday in terms of ACH and wire fraud and check fraud um and having um you know positive pay where you're essentially telling the bank here are the list of valid checks and the amounts and if if a check gets presented that doesn't match that check number or that amount don't cash it because it's not it's not a legitimate check and and a lot of a lot of organizations don't don't take advantage of that and it's it's it's a huge huge enhancement to your internal control structure okay no wait I have not heard of that now I'm old so there there you go but what what this looks like when you describe it to me you're you're taking your chart of accounts and your register you're you're plugging them in and then you're also dovetailing that information to the financial institution and if it doesn't match up then it's kicked out so so basically what you do and now this is an organization if you're still issuing paper checks now of course I know we talked about yesterday let's get away from paper checks wherever possible but if you are adding positive pay is a great enhancement so for example it'll say okay I issued check number um one two three four to Julia Patrick today for a hundred dollars right so higher clearly he misses some zeros but yeah so if a check is presented that doesn't match that amount that check number that pay the bank will will will automatically reject it because it's presumed to be fraudulent because we've seen that you know we've seen I have unfortunately have a client here in Philadelphia where I think twice in the last three years they've been the subject of of check fraud where you know a a con artist has has gotten a hold of their account information which unfortunately is not that difficult to do and essentially creates fake checks that are then drawn on the bank account of the organization so you know we've had to close accounts move them you know we're we're moving them they're actually in the process this week of of moving to an online bill pay platform which we've been asking them to do for years and once and for all this will put that that issue to rest so you know it's interesting you mentioned that I have had that happen to me before bill where I sent a check and it was deposited multiple times via mobile deposit and I was like how can this happen it's the same check is the same check number so having this positive pay I can imagine for an organization because many of our viewers and many of our nonprofit you know um participants here are really at that you know million dollar plus some 25 million plus so we're talking some big checks well above 100 but yes some really big checks and so that's there you know and I think also technology has allowed so many individuals that have um kind of like that ill will if you if you will it allows them to do even more harm it's almost like you know these individuals that have that that brilliant brain are able to think beyond the technology advancement so that's why having having a banker in your boat is so critical to the success and sustainability of your organization um I can only imagine you know having having a relationship so that when you know something's going to arrive actually your bankers is the one to say hey bill did you notice this this is a little out of out of pattern if you will and I think that's that's important what about you know when it comes to cultivating these relationships um in particular perhaps with these community bankers bill how how do you go about cultivating the relationship and I'd like to ask a little deeper question like how deep does this cultivation go and I'm curious if we even ask them to join our board or committees like how do we really engage with the bank yep yeah I think it absolutely you know I would say it absolutely can go as far as as you would want to take it you know you mentioned you mentioned board you know board board seats and I certainly have had clients where you know a member of of their bank and and the individual they've they've built a relationship with you know is is serving on the board certainly being an advocate for the organization I know I gave that that example as well you know encouraging them to attend you know attend client events I know you know in person events aren't aren't aren't happening still as much unfortunately a lot of our clients events are still virtual but that opens up some initial you know some additional possibilities as well you know we've had you know clients here in you know again just you know here in the Philadelphia area and in Pennsylvania where because their events were forced to go virtual they've been able to to reach a far larger audience than they would have otherwise with with an in-person event but you know in terms of of of your banker again it's all about relationships right we always talk about you know building those relationships cultivating those relationships and it's you know it's just a you know a matter of you know meeting to get together you know the the client that I mentioned where you know we found that the the president of that organization you know shared a common interest with my client they had the the same passion for for animal for animal welfare that individual has now you know connected my client with other potential funders as well but has also you know built a relationship with us at YPTC where you know we've met with them we've discussed you know how can we you know how can we you know get you connected with other organizations and other nonprofits that we serve and maybe not even in in bank you know we talk about banking but it goes really far beyond that into other financial services as well I know it's probably getting beyond certainly what we would have time for today but you know investment management and insurance as well you know there's there is that whole suite of financial services and products that that are available to organizations today okay Bill now curveball let me ask you this question so let's go back to your nonprofit you've got you know banking relationship they're getting excited that's a CEO of a bank high profile leader that's the type of board member that you want because you know they're going to attract other interest attention and hopefully dollars would that be a conflict of interest to have that banker who if they are doing business with that organization sit on that board it wouldn't necessarily be now of course we always want to make sure all of our organizations have have a conflict of interest policy and something that you know it's not something you sign once and you put in a drawer you know the policy is one you're reviewing and and I know you know from from my clients you know that the board members need to certify that on on an annual basis I want to go back to I think I'd open talking about the PPP loan right so you know I have a client where you know the their their board treasurer you know is is the controller at at one of at their local bank that they use and it was the bank where they got their PPP loan from now this individual had nothing to do with that completely of course recused themselves from the from the process but still in the interest of transparency you know we made sure you know is that in you know it doesn't violate any conflict of interest and it's disclosed right if you read that organizations 990 you're going to see mentioned right in there hey the organization and I'm paraphrasing but basically the the board treasurer is also an employee at the bank where this organization obtained its PPP loan you know and had nothing to do with the decision or the loan making process right and that's a great practice across the board it could be you know a real estate person it could be an attorney it could be a marketing professional you know there's so many ways in which our board members help to provide additional services and you're right to have that conflict of interest to recuse yourself as a board member from those voting great great best practice that you mentioned before we went live bill you mentioned that there is a worksheet or a toolkit or something you said you're like it's all out there for everyone to access on the ypt website what what exactly is out there and how do we access that oh in terms so in terms of resources now these aren't going to be specifically related to banking but I know I know when Jennifer oliva was on yesterday she mentioned our mission business podcast series which is which is fantastic I think the the latest episode was is in post-production right now so stay tuned that's going to be out soon but if you go to yptc's website it's just yptc.com there's a ton of information there but there's a tab called resources and if you go in there you know that is chock full of of every you know webinar that we did every article that we put out related to to ppp when that happened the employee retention credit tons of other resources and that I mean we made the conscious decision to make that freely available to to everyone regardless whether you're a client of ours or not yeah I think that's what's really cool is very helpful you do not have to be a client of yptc obviously they hope you are but with more than thousand plus clients um you know yeah it's open and it's very interesting information because I find Bill that it um is done in a language that that non-finance people can understand and I think that's super important we don't have a lot of time left but I want to get into one more aspect of the banking relationship and having banking in your boat I'm wondering wondering if you could talk a little bit about some of that strategic thinking like you know everything from lines of credit to maybe managing portfolios you know as you mentioned the charters have changed in the last 10 years and banks can now have those types of service lines and insurance lines and things that they never could before what does that look like yeah it really is or can be kind of that entire suite of of sort of services under one roof now whether that makes sense for an organization or not obviously that that decision is going to going to vary on a on a case by case basis but absolutely you know you want to be having you know those conversations you know are the are the bank products you're using your checking account your savings account you know is it uh you know are they best suited to your to your organization it might be something as simple as um and I know you know interest rates aren't terribly high right now so you're not going to make a huge return on your money but hey should our you know our our our savings you know is there a a higher rate we can get on our savings account or make this checking account an interest bearing account so at least we're we're earning a little bit of return on it because every extra dollar you're getting an interest income is another dollar you can put into the mission of the organization and and certainly what are you know what are the loan offerings of that organization you know if you don't have a line of credit definitely have that have that conversation because it's far better um you know to have the line and never have to use it than to not have the line and and find you wish you were in a in a position that you that you need it investing I mean we could probably spend uh you know we could we could spend a whole session just on investing and and then some and and barely scratch the surface um but of course you know investing for for nonprofits is huge for any organization that you know has an endowment or or just has some funds that they you know want to to set aside for future use in the organization you know so there's um there's a whole suite of of of services that that banks and financial advisors could offer in that realm in terms of of helping you know helping an organization craft their investment policy statement and then what's their what's their spending policy you know how are you gonna gonna spend those assets and if it's an endowment of course making sure it's it's complying with with all the different rules that that exist for for you know making sure you're not drawing too much but also at the same time not drawing too little because the goal is you know that endowment is there to to support an organization um you know I once had um a client board member say to me you know in a way our our endowment is our organization's biggest contributor and and I have never thought about it that way but I said you know what I said you're absolutely right um you know it's it's gifts that were made in prior years but those are gifts that you know obviously since the organization is prudently investing they continue to pay dividends to that organization long after that that original gift was made and and again partnering with the right organization to help manage that is critical amazing I'm so glad you mentioned endowment I've heard um of organizations really focusing on that especially in lieu of maybe not in lieu but especially because of covid really making sure that you know there is um an endowment or some kind of like security fund and I'm also hearing Bill a lot of organizations dipping their toe and considering capital campaigns and that's another great opportunity you know that you really want to make sure that you do have a banker in your boat because that is going to take a little bit more hand holding a relationship for the longevity you know most capital campaigns three to five years um in length or those pledges might stretch out to about five years so having that relationship uh with your banking institute is really important you know Bill it's been great to have you with us and our time is almost up but I've got one quick question and this is kind of a little bit of a nuanced question but it seems to me that when you go into any branch or you you go online and you look at the banks you know service lines they have very specific you know this is what it costs this is what you know the fees are this is how we structure it is it realistic to think that as a nonprofit we can ask for a better rate or get a better deal or have some sort of consideration you absolutely can ask and you should ask right always ask for that that better deal and I will tell you for um you know again for for the for the banks that are out there that are making a um a concerted effort to to really market themselves to the nonprofit sector I think you will find um in many cases um you know a deeply discounted or at least reduced fees that are that are offered to the nonprofit sector so you absolutely should be on the lookout and and and taking advantage of them where it makes sense okay that's like the best news of the day don't you think Jared that is very important even you know wiring funds or something like that there's typically a $30 fee or you know there's there's always a fee on top of something so anytime as you said bill you can make sure that that dollar goes towards your mission and maybe not bank fees and that's a better better place for the mission for sure yeah great news love it well bill this has been great I love this conversation it's one of those things that it's at the heart of how we perform our financial health and yet something we don't talk enough about unless we've had a problem or we don't have a relationship and to quote the nonprofit nerd it's all about that return on relationship the ROR here's bill's information um Philadelphia manager extraordinaire coming to us from the east coast today we have been so honored that you would come and talk to us about bankers in our boat establishing relationships it's such a critical topic and one that I think as we go more and more towards you know digital banking it's going to become that much more important and so this was a great conversation to have bill mentioned mission business a new podcast that yptc is doing here's information about it check it out it's really a cool opportunity to get information about what's going on in the current ecosystem from the wide range of talent that yptc has I mean unfortunately we only have a week with your organization and we have five different voices every day coming in uh is a different view that's really a lot of fun so check them out on this we will anytime you want us back we'll we'll be thrilled to be here well we we have had you know man I'm telling you when this first when we first started we had Jennifer your managing partner on speed dial and that poor woman we were just like what do we have her in our boat that's for sure we were the same boat not quite sure in which way we were rowing but we were in it together yeah because Jennifer was in our boat and she touched a lot of nonprofits across this country because everybody was worried about what was going to go on and it was changing moment by moment again I'm Julia Patrick CEO of the American Nonprofit Academy more importantly she's the non-profit nerd Jarrett Ransom CEO of the Raven group again we want to thank all of our presenting sponsors that have been with us day in and day out and that are so gracious to support these amazing conversations that we get to have you know Jarrett and I at one point we thought are we going to run out of things to talk about and that has just not happened has it Jarrett I mean it's not there's so much and we have so much going through we're virtually booked up for the rest of the year with one entertaining and interesting guest after another so again our sponsors make that possible now this is non-profit power week and so I want to just make sure before we sign off and let you get to the real work of the day we've got really interesting discussions yesterday we had fraud and non-profits we've got financial best practices for boards remote accounting how that actually works bill touched on some of that today and then our ask and answer all friday frayay is going to be all about accounting so that's going to be a lot of fun if you missed an episode certainly you can catch it on our archive wow another great episode Jarrett I learned a lot oh me too and this you have an affinity for financial institutions julia so we didn't share that with you bill but julia really knows her stuff when it comes to financials and I've learned so much and it's been wonderful so thank you for sharing your time talents and expertise with us bill we are so grateful you're so grateful to have yptc joining us this week to bring all of you a power week so make sure that you join us if you missed yesterday's conversation with jennifer you can find that on the archive and stay tuned because tomorrow we'll be back absolutely it's been a lot of fun and as we end another wonderful episode of the non-profit show power week we want to remind everyone to stay well so you can do well see you back here tomorrow everybody