In today’s financial landscape, corporations and foundations are seeking ways to align their financial strategies with their broader missions. One emerging approach is values-based cash management, a strategy that ensures where and how cash is held supports both financial goals and broader societal impact. By thoughtfully managing liquidity, organizations can help build stronger local communities and economies while maintaining security and competitive returns.
What Is Values-Based Cash Management?
Values-based cash management is the practice of aligning an organization’s cash reserves with its principles and long-term goals. Unlike traditional cash management, which primarily focuses on risk, liquidity, and return, this approach considers where cash is deposited and the impact it has on communities, industries, and economic growth.
Organizations that adopt values-based cash management ensure their deposits support mission-driven financial institutions such as community banks, credit unions, and minority depository institutions (MDIs). This approach enables businesses to generate returns while reinforcing their commitments to economic resilience and financial inclusion.
Why Organizations Are Adopting This Approach
1. Aligning Financial Decisions with Corporate Values – Organizations increasingly recognize that cash placement can reflect their principles. Depositing funds with institutions that drive economic mobility or support underserved communities ensures that capital is used meaningfully.
2. Strengthening Community and Economic Growth – Many organizations choose to hold deposits in financial institutions that reinvest in small businesses, affordable housing, and local economies, reinforcing long-term stability in the regions where their employees work and customers buy.
3. Enhancing Risk Management While Diversifying Cash Holdings – Some cash management solutions offer FDIC and NCUA-insured deposits, ensuring that cash contributions are safe, low risk, and still support broader economic growth.
4. Maintaining Financial Strength and Competitive Returns – Values-based cash management does not mean sacrificing returns. Many mission-aligned financial institutions offer competitive deposit rates while maintaining safety through FDIC and NCUA insurance.
How Values-Based Cash Management Works in Practice
1. Strategic Bank Selection – Organizations evaluate financial partners to ensure deposits support long-term economic resilience and reflect their corporate priorities.
2. Balancing Liquidity with Mission-Driven Deposits – Businesses can allocate a portion of their cash reserves to banks and credit unions that support inclusive economic growth while maintaining sufficient liquidity.
3. Developing Internal Policies for Cash Management – Organizations can implement policies that guide cash placement decisions, ensuring alignment with strategic goals.
4. Measuring and Reporting Impact – Companies and foundations can track how their deposits contribute to community development and economic growth, demonstrating tangible benefits while ensuring financial stability.
The Business Case for Values-Based Cash Management
- Preserving Capital with Secure Deposits – Deposits with FDIC- and NCUA-insured institutions provide the same level of security as traditional cash holdings.
- Generating Competitive Returns – Mission-aligned financial institutions offer competitive rates while using deposits to support businesses and communities. This means your cash reserves are growing while you are helping local communities and economies.
- Reinforcing Organizational Mission and Public Trust – Stakeholders increasingly expect companies and foundations to be intentional about their financial decisions. Values-based cash management enables organizations to lead with purpose without compromising financial goals.
Read more: How Corporate Treasurers Can Approach Cash Management Solutions
Ways to Get Started
1. Assess Current Cash Management Practices – Review where cash is currently held and determine if those institutions align with corporate priorities.
2. Identify Mission-Aligned Financial Partners – Explore opportunities to place deposits in community banks, CDFIs, MDIs, and credit unions that support economic growth.
3. Integrate Values into Treasury Policies – Establish guidelines for cash allocation that balance liquidity, returns, and mission alignment.
4. Monitor and Measure Outcomes – Regularly review the impact of values-based cash management decisions and adjust strategies as needed.
Learn more about CNote’s Impact Cash Solution
Conclusion
Values-based cash management presents a strategic opportunity for organizations to align their liquidity strategies with their broader goals. By considering where cash is held and the impact it generates, corporations and foundations can help build stronger communities and economies while preserving financial security and competitive returns. As more organizations seek to connect their financial strategies with their mission, values-based cash management will continue to grow as a powerful tool for responsible and effective treasury management.
Disclosure: This information should not be relied upon as research, investment or financial advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. The information does not purport to provide any legal, tax, financial, or accounting advice.
