Last week, Charity Financials released their latest Charity Banking Report. This is an excellent piece of research giving an overview of the banking within the sector, based on the top 5,000 charities.
Both of these articles prompted a question here at Akoni – are charities with cash in the bank really making the most out of those deposits?
With the latest Charity Financials research, a couple of things stood out…
Cash deposits in the charity sector are increasing
We were interested to read that charities had £500m more cash in the bank than the previous year, from £16.2bn to £16.7bn, and that this is likely to grow over the next year. That suggests a healthy sector, at least among the top 5,000 charities… What isn’t published in the research is how much interest is being received. Our experience over the last year suggests that most charities could improve their returns significantly – often by 10x – based on rates reported to us, and this could equate to an extra £4.5m on the extra £500m alone. Applied to the reported £3.3bn held by the top 25 charities and you’re looking at an extra £29.7m of interest every year!
Charities aren't taking advantage of what different banks have to offer
More than half of the charities included in the data have been with their bank for more than a decade. Maybe this is because of healthy relationships with banks, maybe because it is a lot of hassle to change banks. The latter is definitely true and one of the main barriers we have discovered when talking to charities.
Increasing returns and saving the time and hassle it takes to open and manage multiple bank accounts are the two main variables Akoni’s digital treasury platform tackles. It’s also where our clients are seeing the biggest benefit – increased unrestricted income and more time to spend on other activity.
Please feel free to get in touch with me at Stephen.firstname.lastname@example.org if you’d like to find out how Akoni Hub can improve cash returns at your charity.