Nonprofit Banking Strategies that Protect Large Deposits

January 30, 2019

The Miller Group looks for ways to provide nonprofit banking strategies to protect the assets of our clients.

Nonprofit Banking Strategies that Protect Large Deposits

Part of your fiscal responsibility as a CEO or CFO of a nonprofit is to make sure your banking assets are protected. Do you have a good strategy for large deposits; one that allows you to earn interest AND have convenient access to your funds?

The $250,000 limit on FDIC insurance might be holding you back or requiring you to place your deposits with multiple institutions. But there’s a better way.

Bonnie McConnaughy and Todd York, from Bank of Blue Valley, joined The Miller Group and several Kansas City nonprofit agencies this past fall to tell us about the Insured Cash Sweep® (ICS) service and Certificate of Deposit Account Registry Service® (CDARS). They allow companies to protect their assets and earn interest with a single banking relationship in their own community.


The CDARS works with a network of banks that each look after $250,000 of your deposit. For example, if you invested $5 million through a network member, you would have 21 CDs issued by 21 banks in that network. Yet you would work with just one institution, which would set rates, consolidate your interest payments and issue statements.

FDIC protection is maintained, Bonnie explained, because each institution has $250,000 or less of your deposits. The service is available for up to $140 million total, and it’s open to all types of businesses, including nonprofits and public funds.

The Bank of Blue Valley has been part of the CDARS Network since 2003 and is one of more than 3,000 member institutions. The average CDARS placement is $2.5 million.


The Insured Cash Sweep service is similar to the CDARS, with different liquidity options. The ICS Demand option offers unlimited deposits and withdrawals, and the ICS Savings option allows withdrawals up to six times a month. Many depositors ladder their investments to cover all their liquidity needs, while maximizing potential earnings.

Implications for Capital Campaigns

Nonprofits and churches often use the ICS service and CDARS as ways to keep money insured during capital campaigns. Fully protecting those early first deposits and allowing them to earn interest while the campaign progress is a key benefit and one worth exploring.

While risk management strategies don’t typically cover banking practices, The Miller Group continues to support nonprofit communities in various ways, working with best-in-class partners to protect the assets of our clients. For more information on the CDARS and ICS service, visit the Bank of Blue Valley.

About The Author

Pat Murphy

Pat Murphy
Email As Chief Revenue Officer, Pat has more than 25 years in the insurance industry. Pat works closely with producers, managing the entire scope of insurance offerings, strategy and risk management solutions for businesses. He also works closely with multiple nonprofit clients as their key advisor. Pat specializes in the nonprofit sector. He is a frequent guest speaker and presenter at nonprofit association conferences.

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