Third sector banking : A blueprint for high growth alternatives to de novo branching

Purpose – US foundations make up such a large part of the economy that they form a distinct economic sector. In the UK this is commonly referred to as the third sector. The first and second sectors are private business and the government itself. In the United States, the third sector controls over $3 trillion and enjoys exceptional liquidity. This article aims to provide a blueprint for a highly productive engagement of foundations and banks to harness these assets for the benefit of not‐for‐profit organizations, the depositing foundations, and the banks themselves Design/methodology/approach – The paper explains how these third sector enterprises., intent on being helpful, are so befuddled structurally that they have failed to do what any person would do with similar liquid assets, It then supplies an organizational and marketing methodology for harnessing some of those assets to the benefit of the respective missions of foundations, not‐for‐profit organizations, and for‐profit banking companies. Findings – A modest reorganization of existing bank and philanthropic structures will open the door to harmonious engagements between foundations and banks for their mutual benefit and for the benefit of their clients and beneficiaries. Originality/value – The findings herein are a novel utility which comes into being through the innovative engagement of foundations, not‐for‐profit organizations, and banking companies that want to enjoy low risk, high reward expansion of both deposits and assets.