The products, services, and relationships provided by your bank have a direct impact on your camp’s overall financial success. The needs of each camp are as diverse as the camp industry itself. Your banking needs are directly tied to, or based upon, the type of organization you operate (for-profit or nonprofit), the level of camper growth experienced, the amount of revenue generated, the overall economy in your region, and many other factors. These ten significant bank products, services, and programs will positively impact your camp. This is not an all-inclusive list, nor is it necessarily numbered in order of priority, but it’s a start in evaluating your overall camp’s banking needs.
One: Nonprofit Business Checking Accounts and Zero Balanced Accounts
A sizable portion of camps operated in the US is organized under IRS rules as nonprofit organizations. Many banking organizations offer checking and/or savings accounts designed to serve this group. These accounts may offer some of the following key benefits to your camp:
- Free account regardless of account activity
- Free ancillary services such as free checks, deposit slips, and free online banking
- Some may pay interest on collected balances
Zero Balance Accounts are offered by most financial institutions to meet the customer’s needs for a certain type of account, such as health insurance, employee payroll, or other specific needs. When checks are written off these Zero Balance Accounts, the bank’s operating system automatically pulls money from the main operating account to cover the checks. This account offers unique benefits to camps, including:
- No access to main operating account funds, for fraud prevention
- Ease of reconciliation due to limited check writing
- Easy financial reporting based on specific withdrawals
Two: Fraud Prevention Tools
Fraud costs the financial markets and consumers millions of dollars each year. What steps are you taking to reduce potential fraud to your camp’s accounts? Have you discussed your specific risks with your banker? The following are key services and methods to help prevent unauthorized access to your funds:
- Positive Pay: If you write a fair amount of checks each month, this is a great tool to prevent fraudulent checks from hitting your account. Positive Pay is a daily verification with your bank regarding the checks you have written as compared to the checks presented for payment. With this tool, you catch fraudulent checks before they hit your account.
- Establish automatic clearing house (ACH) blocks on your accounts. This tool prevents any unauthorized electronic transfers on your account through an ACH transaction.
- Dual control procedures within your camp for ACH transactions, funds transfers, wires, and online banking: In each of these areas, a second person within your organization must approve and authorize these transactions.
- Merchant card processing: Make sure your terminals are payment card industry (PCI) compliant and chip card ready for ultimate fraud protection.
Lastly, follow these precautionary measures for safeguarding your camp:
- Reset passwords routinely if not already prompted by your bank system.
- Use Touch ID and/or six-digit passcodes on smartphones that have access to camp information.
- Wi-Fi access on camp property should be protected by a routinely changed password.
- Do not respond to emails from any entity (including the IRS) asking for account, tax ID, personal identification information, or passwords, as this is an illegal phishing attempt. Always verify any email request for movement of funds with the sender.
Three: Program for Protecting Deposit Balances over FDIC Insured Limits
Most camps work with one primary banking institution. Because of this, you may have excess funds that exceed the FDIC insured limit of $250,000, which is assigned to each tax payer entity. Therefore, the following options would further protect/insure your deposits in excess of $250,000:
- The Certificate of Deposit Account Registry Service (CDARS) is a great option for investing excess funds with one bank, at one rate, while garnering the power of those funds being insured by multiple financial institutions. CDARS is a widely respected and appropriate way to protect funds in excess of the FDIC insured limit.
- Purchase certificate of deposits with other local community banks with your excess funds. Community banks typically will pay the highest rate for your excess funds.
Four: User-Friendly ACH Origination — Electronic Transfer of Funds
ACH origination is now a vital tool for many businesses. Your camp will run more efficiently with this product, which is beneficial in the following areas:
- Payment of vendor services, utilities, payroll for full/part-time staff, and other bills.
- Collection of camper fees (one time or ongoing) and/or receipt of donations (one time or ongoing).
ACH origination involves creating a template through your financial software or through your bank’s online banking platform. This remains a reasonable cost method for making payments or receiving funds. Institutions will charge you for file submission and for each ACH debit. For most banks, these charges are reasonable, and these costs can be offset by your primary account, which may be on account analysis . (All banks offer business accounts to commercial customers — like summer camps — that are on account analysis, meaning all the fees assessed by the bank during the month for all types of transactions for that account are offset by an earnings credit based on the average balance held in the account.) For example, if your account during the month had three ACH transactions, four outgoing wires, 40 checks cleared, ten deposited items, and one incoming wire, which all accounted for $300 in fees, this total fee would then be compared to the earnings credit. Let’s say the earnings credit was $250. As a result, the total service charge for your business account for the month would only be $50.
Five: Flexible Loan Terms, Repayment Schedules, and Seasonal Lines of Credit
Choosing the right loan, along with related terms and conditions that best meet your camp’s needs, can be instrumental in supporting your overall financial strategy. A myriad of good loans are available for camps, such as loans for new camp property, renovations or expansion to existing facilities, supporting Fund-raising campaigns, meeting seasonal cash flow needs, and new rolling stock or equipment/programming gear. Each of these loans is evaluated based on rate and term, collateral pledged, overall camp cash flow and financial condition/trends, and sources of repayment.
For term loans for real estate, rolling stock, and equipment, request monthly payments of interest and annual payments of principal (a principal plus interest structure). This improves monthly cash flow and allows you to repay your loan with annual payments during peak cash flow times of the year. Furthermore, you pay less interest over time resulting in potentially huge savings for your organization.
Establish revolving lines of credit to assist with seasonal cash flow needs for your camp. This allows you to draw funds from the line during slow times of the year and repay the loan following receipt of summer camper fees and donations. These loans are typically collateralized by camp real estate.
Establish lines of credit or term loans to bridge the gap between capital campaigns and actual receipt of committed pledges. Sometimes, the need for new infrastructure and facilities is required quicker than funds can be received by donations or capital campaigns. Most banks will lend you money based on a percentage of committed pledges, such as 70 to 90 percent of the committed total. This will allow you to make the needed improvements via loaned funds while you wait on pledges to be received. The loan’s term length depends upon the timing of final receipt of pledged funds. The loan is also usually collateralized by camp real estate.
Six: Camp-Friendly Merchant Card Processing
Utilize merchant card processing for payment of camper fees and donations. This is probably included within your online registration platform. Work directly with vendors or your bank to receive low or fixed-based pricing and to reduce settlement time. Furthermore, ensure your vendor and terminals are PCI compliant and chip card ready.
Seven: Payroll Solutions for Domestic and International Staff/Counselors
The payment of your seasonal staff and counselors can be cumbersome and time-consuming for you and your employees. Many camps continue to write checks and have their staff/counselors utilize a local bank on the weekend for spending money and personal needs. Unfortunately, it may not be a long-term solution, as fewer banks now stay open on Saturdays. There are alternatives worth pursuing, the success of which will depend on your situation and the “home” of your seasonal staff:
- Prepaid debit cards (reloadable): Staff and counselors apply for a prepaid debit card at the start of the season during your orientation. Give them several card options from which to choose, as there are many providers available (MasterCard, Visa, etc.). There is typically no credit check or requirements to apply. The card is received within five to ten business days. At each payroll period, you create an ACH direct deposit directly to the card (be fully aware of the process and cost, as mentioned previously). Staff can use the card wherever Visa or MasterCard is accepted. Be aware of any usage fees, card limits, and minimum balances to avoid service charges. For international staff, make sure the card is accepted in the country of origin for your staff, so they can use loaded funds when they return home.
- ACH direct deposit for payroll: This requires each staff member, whether domestic or international, to have an account to receive their payroll. This may be the least cumbersome process for you, as it puts the requirement on the staff to provide banking information and to carry a debit card from their own bank for their personal expenses while working at your camp. ACH direct deposits can be initiated for both domestic and international staff members. International staff members would have to open a local account for direct deposit. For final payroll, they can utilize a prepaid debit card or you can arrange an ACH transaction to send their payroll directly to their account at home. Be aware, however, that not all banks will initiate an international ACH transaction.
Eight: Remote Deposit Capture
This service allows you to deposit checks while sitting at your desk through an online platform and scanner. Funds are directly deposited into your account and you would continue to hold the items for a period of time. Remote deposit capture does have a monthly service charge and your scanner must be bought or leased from your bank. This service is beneficial because it reduces out-of-office time for staff and travel expenses to and from your bank. In many cases, the cost of the service is less than the lost time and expenses you incur.
Nine: User-Friendly Online Banking for Account Exporting to Camp Financial Software
Online banking systems, which allow exporting of bank data directly into your camp financial software, are useful to help you stay on top of your camp’s finances. Online banking makes for easy reconciliation and management reporting to your board and management team. The systems are typically free and come with a number of options to serve your needs, such as ACH origination, wire transfers, deposit transfers, and payment of loans. Furthermore, online access can be obtained via your mobile phone or tablet device.
Ten: An Excellent Bank Account Officer
Nothing can replace the relationship provided by an excellent account officer who understands your business. Account officers are truly partners with you in your endeavors. They are helpful in strategy, business and financial planning, camp board membership, and providing introductions to industry partners, camp prospects, and potential donors. Excellent account officers act like brand ambassadors for your camp. The chief financial officer of a large camp once told me: “Nothing can replace the relationship and trust created between the camp representative and his banker. The banker who works hard to know and understand the camp business will create great trust, allowing the camp to call on him or her when those unique, special, or emergency circumstances occur.”
He also said, “The camp knows that their banker is looking out for them and is thinking ahead to help and serve the overall mission and ministry of their camp.” Therefore, don’t underestimate the value of a great personal relationship with your banker.
The products and services mentioned here will provide you and your camp needed benefits for loans, deposits, and cash management programs. These methods and tools have proven successful for many, but keep in mind the unique financial needs of each camp. Seek guidance from your local bank before initiating any unfamiliar products or services at your camp. If you don’t have a meaningful relationship with your banker, find one who understands your passion and is driven to serve your camp. Ultimately, helping you achieve the mission and ministry of your camp should be the number-one focus of a good banker.
Richard Solomon, senior vice president of American State Bank, is a 30-year banker in Texas. He has spent the last ten years serving the youth camp industry in Texas by assisting large and small camps. He also serves as board member to Lakeview Methodist Conference Center, Palestine, Texas. His passion to serve this industry is driven not only by his personal experiences as a youth, but the significant impact camp had on his family.