5 Steps to Making this Happen:
Lately I’ve been talking a lot about how nonprofits and schools can strategically cultivate relationships in order to secure the resources they depend on for long-term sustainability and I hope you have been inspired through the real-life stories I illustrated for you of many of my other clients who have successfully implemented this strategy. Today, I’m going to share with you some more examples of how you can grow another relationship with a specific type of stakeholder – your bank.
When you think about it, your organization’s bank has a big stake in your success. Why?
1. When your organization is financially stable, you are less of a risk to them.
2. As your organization grows its revenue, your bank benefits because their assets grow.
3. Your bank serves a neighborhood or community just like your organization does. When your organization is strong and has a positive impact on the community, you have more clients who need a bank to save money with.
4. Having nonprofits like yours as clients offers the bank an opportunity to say they support community organizations that help make the community a better place for everyone.
Clearly, banks benefit when they have you as a client. But the benefits to your organization of banking with a certain bank should go way beyond the ability to have a checking and savings account. Let me show you how:
1. Your banker should offer solutions. Your banker should be sitting down with you, quarterly, to review your situation to offer solutions that help you better manage your cash flow. If you contract with a county government to provide group home services to teens that are in the foster care system and receive large chunks of money at a time for expenses over a three or six month period, your checkbook is likely not paying interest on all that extra money it’s sitting on. When all’s said and done, all that excess money could be doing something other than just sitting stagnant for a month. Shouldn’t your banker suggest transferring a big chunk of that money into a special savings account or money market fund that pays some interest? Depending on the interest rate, this could be a significant amount. This happened to me once. As my business grew, I found myself spending a lot of time making trips to the bank to make deposits. I wanted to deposit my client payments so efficiently that I found myself making trips to the bank the second the mailman walked up my steps with my check. I got to the point where I was making 10 trips to the bank a month. Out of curiosity, I calculated this out and found I was spending five hours every month driving to the bank instead of using this time to help more clients. Ridiculous, right? When this finally dawned on me, I called my banker and asked what I could do about it. Within a week I received a remote deposit scanner and software that allowed me to make deposits literally, from my desk. After six free months, the cost was only $50 a month. Seriously, $50 is just a fraction of the value of my time working for my clients or connecting with new clients.
2. Your banker should be your cheerleader. Your banker should have an interest in your organization’s mission because you are their client. While your mission probably resonates with them, it’s up to you to empower them with the knowledge about how to talk about your organization and your needs. Bankers are relationship people out in the community, and great bankers should constantly look for connections and opportunities for their clients. Your bank probably has a foundation that’s a match for your mission. Great bankers guide you through the process of educating the right foundation about your organization and perhaps submitting a grant application.
Do you see what I mean? It’s extremely important to find the right bank and/or banker to develop a mutually beneficial relationship with. Why? It’s all about relationship cultivation. Let me show you.
I met my current business banker with PNC Bank in Milwaukee while working for an alinea client. My banker fell in love with our client and facilitated a major sponsorship donation for their annual event. She constantly talked about the school (still does) and connected the school to people who could help. At some point, she sat down with the decision makers of this school to talk about their current banking relationship and gained an understanding of this school’s needs. She presented a proposal that showed she could significantly reduce banking fees, and that PNC Bank could also offer some kind of financing for the organization’s expansion project. I literally watched her become a cheerleader for my client.
After observing what alinea was doing for this client, she sat down with us and admitted she was so inspired by our work that she immediately became our cheerleader. She told us, “When I’m meeting with a prospective client that happens to be working with alinea, they get extra points, because I know they’re looking outside their four walls.” From here on, she was always referring me to nonprofits. At this point she hadn’t even asked about my current banking relationship. After knowing her for almost a year, she asked to sit down with my husband and me to talk about my business and personal needs. She immediately found a way to help us consolidate some debt, secure a short-term loan, open a business line of credit, and save money on fees. I was sold, and I haven’t looked back since. I banked with my past bank for 25 years, and in all that time no one suggested I sit down with a business banker to review my business needs. I’m now a cheerleader for PNC Bank because I feel like I’m my business banker’s only client.
Whenever I sit down with a prospective client, I now always ask them about their current banking relationship. Sometimes nonprofits look at me funny because they’re not sure what a banking relationship is supposed to look like. Recently I sat down with a nonprofit that had a small budget of $150,000. They were paying $90 per month in fees. I told them I thought that seemed high and I connected them with my business banker who immediately saved them fees. I worked with a larger organization that had $300,000 sitting in an account earning no money. It was a kind of endowment. When I asked them how often their banker came to see them to talk about their account, they laughed. I connected them with my business banker, they moved their money and they were also encouraged to apply for a significant grant from the PNC Foundation because their interest in serving children from birth to five matched the organization’s mission to provide early child care and education to low-income families.
Real relationship cultivation takes time and thought. Here are the steps you should take beginning today so your bank can become your cheerleader:
Steps
1. Start by assessing your relationship with your current bank. If you’re not happy, you could start by asking for a meeting with someone who is supposed to serve your account and ask them to meet with you to review your financial situation and make recommendations about how you could be doing things better. If you decide your current bank is not a match, go to another bank branch in your neighborhood or try to get a referral from another nonprofit that is excited about their bank.
2. Once you find a bank you’re interested in, call them and ask to schedule a meeting with a business banker who specializes in nonprofits. Tell them you’re checking out some new banks because you’re not happy with your current bank. At the meeting, educate the banker about your organization and its financial situation. Tell them you’re looking for a banker that will be interested in your organization’s success and will be willing to spend the time to work with you to do a better job with your finances. You’re interviewing them.
3. Once you choose a bank, remember strategic relationship cultivation is not about asking for money or other things. Reach out to your banker and offer to take some time to share your story through a tour. Remember to tell your story in a compelling, concise and consistent manner and be clear about where you want the organization to go and what you need to get there. Ask them what they think and don’t forget to ask them, “Who else needs to know about us?” They likely will think of five other people who will be interested in your organization’s mission. They might even ask, “How can I help?” That’s it. That’s all you ask for except to put them on your mailing list to stay in touch.
4. Remember to send a hand written thank you note to your banker after your meeting.
5. Mark in your calendar that you need to do some kind of follow-up in about a month. That could be an email to your banker sharing a success story, it could be a personal invitation from one of your board members to an event, or it could be you noticed the banker was written up in the local business journal because of an award they received. Just reach out.
6. Begin to reach out to the other people your banker thought would be interested in your organization. Call them, mention the connection and ask if they would be interested in learning about your organization or taking a tour. If not, no worries. Ask them if you could just put them on the email list. If not, no worries. Thank them for the opportunity to spread the word about your mission.
7. If you do this right, and you’ve inspired people and been clear about where you want to go and how to get there, the people who are inspired will offer to help in ways that are meaningful to them, which could result in millions of dollars like it did for one of our clients.
If you’ve got stories, please share them with us. Let me know if this posting has been helpful and how you plan to leverage what you’ve learned.
