Independent Banker - December 2023 - 54

they are both great deposit candidates and they are great
loan candidates, " says Edmeades. Working closely with
governing boards of nonprofits is also a valuable referral
source for the bank.
" If you go through and look at all the nonprofits that
are out there, they're everywhere, and they need banking
services, " says Scott McComb, chairman, president and
CEO of $1.8 billion-asset Heartland Bank in Whitehall,
Ohio. The community bank works with more than 200
nonprofit organizations that run the gamut from local
Lions Clubs and school-related fundraising groups
to churches and large
community development
institutes (CDIs).
Depending on the size of
the nonprofit, some of them
have unique lending and
depository needs. " We find
that most nonprofits don't
borrow a lot of money, and
they're great depositors, "
says McComb. Heartland
Bank's nonprofit clients
represent about 4% to 5% of
its deposit base.
In smaller communities,
the people doing that work
are volunteers, and they
may not have an accountant
or bookkeeper, he says.
" They need somebody to
help them navigate how to
do certain things, " he adds,
" and that's perfect ground
for community banks to
shine, because we will spend
the time with them to do
things right. "
PROVIDING NEEDED GUIDANCE
Nonprofits may be
passionate about their
causes, but some don't have much business experience
among their staff or their boards. Especially with small
and early-stage nonprofits, community banks may need
to be more proactive about recommending services or
introducing best practices.
" They are focused on their mission, and they may
not be focused on banking, " says Mallory Ahl, senior
vice president, nonprofit and government relationship
manager at the San Antonio office of $48.6 billionasset
Frost Bank. " We need to bring that focus and say,
'OK, these are things you need to be looking at to make
your organization run more smoothly.' " Bankers can
recommend even small changes, such as saving time by
using a remote check scanner to deposit checks.
Frost has a dedicated team of bankers who routinely
call on their nonprofit customers. The community bank
also encourages its bankers to sit on boards as a way to
be involved in their communities and also to share their
banking knowledge with nonprofits.
" For Frost, it's us helping our community by banking
these nonprofits and giving them the financial tools that
they need to be more efficient, but also to do things like
help prevent fraud and do
the best with their finances, "
says Ahl.
" I knew I wanted
a banking partner
that would be more
responsive. When
the phone rings, he
picks up, and when
I email, he responds
very, very quickly, and
I really appreciate the
responsiveness. "
-Tara Hammond,
Hammond Climate Solutions Foundation
Community banks often
play a dual role with their
nonprofit customers. " We're
not only their banker; we're
their financial consultant, "
says Edmeades. Bankers
are in a unique position
to provide guidance. For
example, some nonprofit
clients might not be aware
of the advantages of a
positive pay product.
" That's where we as
bankers can come in and
really assist them, because
as a nonprofit is growing,
their business is growing
and they are leaving
themselves open to more
risk, " she says. " We can help
guide them and ensure that
they are getting the best
product mix so they can
run their business model
efficiently and also safely. "
Beneficial State Bank
also encourages nonprofit
groups to work with other
community consultants that would make their business
strong, such as a good attorney, CPA or PR firm.
UNDERSTANDING FUNDING SOURCES
A nonprofit is a business, which means it needs a variety
of financial products just like other businesses, including
lines of credit and loans such as financing for equipment,
a new vehicle purchase, or a loan to buy or build its
own facility.
One of the big differences in lending to nonprofits is
the cash flow analysis and understanding how and when
54 // ICBA Independent Banker // December 2023
Independent Banker - December 2023

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