Increasing yields and providing employee incentives

Situation:

A non-profit community health center was seeking to increase the yield on its safest funds, which were invested in cash, CDs, U.S. Treasurys, and short-term bonds, yielding less than 1%. They also wanted to create additional incentives to retain key executives.

 

Action Steps:

Grant Hinkle & Jacobs repositioned $6 million of the organization’s $10 million liquid assets into a cash alternative program that delivers:

  • 3% to 6% yield on its safest assets, without sacrificing safety or liquidity.
  • Increased yield as interest rates rise.
  • $16 million of cumulative life insurance death benefit protection on its three key officers, a portion of which is to be paid to their heirs as an additional executive benefit if death occurs while employed by the health center.

 

Results:

Concerns about cash flows and yields were successfully addressed and the board feels confident the organization will be financially protected should one or more of its key executives pass away.