Bikes and Bank Runs – What we learned from Silicon Valley Bank

In the aftermath of the Silicon Valley Bank collapse, I’ve been contemplating the irony of a refrain that we in the nonprofit sector often hear. “If only nonprofits were run more like a business…” 

When I heard about Silicon Valley Bank, my first thought was about the safety of SVBC’s finances. Would there be a domino effect? Should we be worried?

 To start with the ending to the story, I want to reassure you, the people who write checks to SVBC and who trust us to be good stewards of your money, we are. For years, the Finance Committee of the SVBC Board has directed me, the Executive Director, to employ a “belt and suspenders” approach to money management. All of our money is managed in a way that keeps us under FDIC limits. Our primary bank, Heritage, offers a program where they sweep any money in excess of $250,000 and spread it around (I’m putting this in non-finance speak for us commoners).

  I also wanted to note that it is only recently that the organization needed to worry about having over $250,000. When I came into this role in 2015, we had no operating reserve, and at times, struggled to make payroll. There was no money to be managed! That’s a fairly stressful position to be in so from 2015 to 2017, we set out to establish a 3 month operating reserve. Since that time, the organization has taken on fiscally sponsored projects and has become more adept at securing foundation grants, both of which have infused our accounts with larger sums of money to be spent over multi-year periods.

Of an annual ~$1.5 million dollar budget, approximately $350k comes from donors like you. Thank you for trusting us to put your money towards making the streets safe for you and your loved ones to ride bikes. 

For the most part, non-profits ARE run like businesses. We are collections of people who organized themselves to accomplish community benefits that are often overlooked by the for-profit sector. In some ways, we in the nonprofit sector do NOT run like a business. And in some important ways, it’s preferable and essential that we don’t.