12. Manage Banking Relations

  1. Charles K. Coe

Published Online: 21 MAR 2012

DOI: 10.1002/9781118386064.ch12

Nonprofit Financial Management: A Practical Guide

Nonprofit Financial Management: A Practical Guide

How to Cite

Coe, C. K. (2011) Manage Banking Relations, in Nonprofit Financial Management: A Practical Guide, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118386064.ch12

Publication History

  1. Published Online: 21 MAR 2012
  2. Published Print: 13 JUN 2011

ISBN Information

Print ISBN: 9781118011324

Online ISBN: 9781118386064



  • banking relations;
  • banking services;
  • direct payment;
  • earnings credit rate (ECR);
  • request for proposals (RFP)


A nonprofit’s bank is an important financial partner. Banks make payments and hold money. They also give short- and long-term loans, safeguard securities, and provide investment services. Banks vary with regard to the extent, quality, and price of the services they render. Banking relations include: selecting the bank and managing banking services. This chapter discusses various sections of request for proposals (RFP). The heart of the RFP, the scope of services, delineates services required for the bank. A nonprofit can bundle all of the core services into one RFP or unbundle some of them into a separate RFP. The nonprofit develops a separate RFP for each of the secondary services discussed in the chapter. A nonprofit can compensate its bank one of two methods: direct payment and compensating balance. The earnings credit and earnings credit rate (ECR) are used to calculate the compensating balance needed to offset the service charges.

Controlled Vocabulary Terms

Banking; Investment services; Nonprofit management; Request for proposal