Academic journal article ABA Banking Journal

Meridian Finds Big Potential in Nonprofits

Academic journal article ABA Banking Journal

Meridian Finds Big Potential in Nonprofits

Article excerpt

It may be hard to believe, but there is a market with nearly $1 trillion in holdings that often feels ignored by the financial services industry. This market is growing four times faster than the rest of the economy, employs about 7 million people, and represents an estimated 6% of the nation's economic output.

This market comprises the estimated 1.2 million nonprofit organizations in the U.S., and includes healthcare, educational, religious, social, and arts institutions. Combined, "nonprofits" received more than $124 billion in contributions last year.

Juggled and ignored

Yet when Meridian Asset Management conducted a survey in 1988, most nonprofits complained that they did not receive the same level of service from their financial institutions as businesses receive. They often felt as if they were being "juggled" or ignored by their financial institutions, and said what they really wanted was one contact who understood how nonprofits operate.

Recognizing that nonprofits represent a large and growing market, Meridian set out to serve them more effectively. We established a nonprofit specialty area and staffed it with people who had not only financial expertise, but also an understanding of the unique characteristics of nonprofit clients. Many had experience in fund-raising, community affairs, or serving on nonprofit boards.

Today, Meridian Asset Management provides services for over 500 nonprofit clients that have $1.5 billion under management. These clients include a number of top healthcare institutions, colleges, foundations, townships, and municipalities.

Types of services

We offer nonprofits a broad range of investment services, overseeing working-capital investments, planned giving, endowment management, and employee-benefit plans. Most importantly, we work hand-in-hand with each institution to establish and implement investment strategies. (One of our biggest surprises when we started working with nonprofits was the number that did not have written investment guidelines!)

Among the services we offer are: short-term asset management with daily cash sweeps of operating income; evaluation of endowment investment needs; and assistance with planned-giving programs. Our nonprofit specialists also serve as liaisons to more traditional banking services provided by Meridian Bank. …

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