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Bank de-risking of the NPO sector

Problem
NPOs around the world are impacted by issues of financial access – inordinate delays in cash transfers, onerous due-diligence requirements, inability to open bank accounts and arbitrary closure of bank accounts – collectively classed as ‘de-risking’ activities by financial institutions.

Impact
NPOs are
- spending more time getting transactions processed or having difficulty on-boarding as a client
- unaware of systemic drivers behind decisions by banks (including on closing down accounts)
- impacted more based on size, so smaller organizations more affected than larger ones. Also, small organizations are not able to cope with banks’ extended due diligence requirements.
- There is little or no recourse to remedy for them
- seeing an increase in workload for their financial staff, varying from 35 per cent to 100 per cent compared to five years ago
- all being tainted with the same brush as a consequence of the bad behavior of a few
- seeking/finding their own solutions for problems and issues with their bank (one-off, and not systemic)

Consequence
No delivery of food, medicine, education
Cancelled projects, less services for communities, etc.
Resources spent on bank transactions rather than missions
Damage to reputation
Limited ability to raise funds for NPO services nationally and across borders