Banking Nonprofit Organizations—The Way Forward

Our Advisory Board member Rick Small, and AML RightSource Vice Chairman John Byrne have led a multi-year effort resulting in the “Consortium for Financial Access” and their guidance for both the nonprofit organizations (NPOs) sector and the financial industry. The ongoing challenges for the financial sector with regards to NPOs have been due to a number of factors. This process began under the auspices of ACAMS and the World Bank, and included law enforcement, regulators, the financial sector, the charity community and some policy makers. Over time, Rick and John kept many members of the group together and decided to address these issues with a guidance document that stresses communication among impacted stakeholders as the primary mission, if we are to resolve the problem of de-risking of NPOs.

The guidance is meant to serve as a resource to assist in bringing NPOs access to financial resources and to begin the reversal of the trend known as “de-risking”. It is also meant to provide financial institutions (FIs), and governments with information on ways FIs can respectably prepare their response to regulators on the reasoning and processes used to provide financial access to NPOs. Some of the topics covered in this piece include the distinctions between nonprofit and commercial FI customers, the way NPOs work to prevent diversion of assets, information on steps NPOs can take to secure satisfactory access to financial services, and ways governments and financial regulators can help increase NPO’s access to funding.

The guidance document published June 19th, 2019 is the outcome of the many meetings during the past several years, with the hope that it will give direction to those that share the goal of opening financial access to NPOs, enabling them to serve their clients, and all those in need of assistance.

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AML RightSource

AML RightSource

AML RightSource is the leading provider of AML/BSA and financial crimes co-sourcing solutions. With over 900 AML/BSA professionals, AML RightSource assist clients in meeting their AML/BSA regulatory demands. The company’s current services include transaction monitoring, alert backlog management, enhanced due diligence reviews, fraud, and financial crimes advisory services. AML RightSource, a Clarion Capital Partners portfolio company, is headquartered in Cleveland, Ohio, and has additional facilities in Ohio, Arizona, New York, and Mississauga Canada.

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