Across the United States, foundations play a pivotal role in addressing society’s most pressing challenges. Yet, while their grantmaking programs drive meaningful change, a powerful opportunity often sits unnoticed on the sidelines: idle cash reserves. These funds, typically held in low-yield money market accounts or traditional banks, are crucial for liquidity and operational needs—but they can do more. Today, foundations have the chance to align even their “waiting” dollars with their mission, putting idle cash to work without sacrificing safety or liquidity.
The Problem: The Hidden Cost of Idle Cash
Maintaining cash reserves is essential for every foundation’s financial health and grantmaking obligations. However, leaving significant sums untouched in traditional accounts comes with an opportunity cost. Not only could those funds be earning more, but they could also be advancing the very missions foundations were created to serve.
In a world increasingly focused on maximizing positive impact, cash sitting idle represents untapped potential—potential to drive community development, support small businesses, and foster greater social equity.
Learn more about CNote’s Impact Cash Solutions
A New Solution: Mission-Aligned Cash Management
Fortunately, the financial landscape is evolving. Foundations now have access to alternative cash management solutions that:
- Preserve Capital: Prioritizing principal protection through insured accounts (FDIC/NCUA backed).
- Maintain Liquidity: Allowing flexible access to funds when needed.
- Advance the Mission: Deploying cash into community-focused financial institutions, like CDFI banks, credit unions, and mission-driven investment vehicles.
These solutions allow foundations to meet fiduciary responsibilities while amplifying their impact before a single grant is disbursed.
How It Works
Instead of depositing cash solely with traditional big banks, foundations can place idle funds into:
- Community Development Financial Institutions (CDFIs): Banks and credit unions committed to serving low-income and underserved communities.
- Mission-Aligned Cash Vehicles: Specially designed insured accounts that distribute deposits across a network of mission-driven financial institutions.
This strategy ensures that even “parked” dollars are actively supporting affordable housing projects, small businesses, climate initiatives, and other critical community needs.
Learn more about how Impact Cash works here
What Foundations Should Look For
When evaluating mission-aligned cash management options, foundations should prioritize:
- Insurance Coverage: FDIC and/or NCUA backing to protect principal.
- Liquidity Terms: Clear access timelines to ensure operational flexibility.
- Impact Reporting: Transparency about where funds are deployed and the impact generated.
- Alignment with Mission: Choosing partners and institutions whose goals match the foundation’s priorities.
Conclusion: Every Dollar Can Drive Change
Foundations are in a unique position to lead by example. By reimagining the role of idle cash, they can unlock a new lever for impact that complements their grantmaking. With innovative, mission-aligned cash solutions now available, there’s no reason for foundation funds to sit idle when they could be working for good—supporting communities, empowering entrepreneurs, and building a more equitable future.
The opportunity is clear: Turn idle into impactful. Put your cash to work for your mission today.
