Dear FJC Community,

The recent seizure of Silicon Valley Bank, followed by the closure of Signature Bank and the accompanying market turmoil in the financial sector has put many on edge this week.  At FJC, we began the week on Monday morning wondering whether there was a more systemic crisis in the offing.  As the week has evolved, it appears as if the financial system is more sound than it was in 2008, and the weak spots more contained.  Still, the market fluctuations and daily, sometimes hourly, news updates are unsettling, to say the least.

We spent the early part of this week in “fire drill” mode, taking a close look at our investments, third party vendors, and systems to see where there might be vulnerabilities to SVB, Signature Bank, or other affected parties. 

FJC has reviewed its operational processes and third-party vendors and has confirmed zero impact to date due to the recent bank closures and no potential disruptions that might stem from the midsize banks on various watch lists.

Finally, it bears mentioning that while many of our donors think of their DAF accounts as “my bank account for philanthropy,” we are not a bank.  Except in cases where our donors specifically recommend that their account funds are invested in illiquid assets, our assets are largely invested in cash, money market funds, and mutual funds (equities and fixed income) that are easily convertible to cash. For our donors invested in our Agency Loan Fund, the majority of our loans to nonprofits are payable within two years, with our longest duration loan maturing in 2027.  In any case, this portfolio of loans benefits from credit enhancement from a private foundation that fully protects donors from principal loss. 

Our goal, as always, is to be maximally responsive to our donors, and to maintain sufficient liquidity to remain operational for years, even if all of our donors recommended 100% of their accounts to be deployed as grants today. 

Please call us to make an appointment with myself or CFO / CIO Regina Rodriguez if you’d like to get more details on all this. You can reach out at (212) 714-0001 or fjc@fjc.org.

Sincerely,

Sam Marks

Chief Executive Officer