Question: Best way to deal with bounced checks?

Our fundraisers seem to have received more NSF (non-sufficient funds) checks this year than in past years. I guess it’s the economy, but we still need our money. What should we do about these bounced checks?

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Advice from PTO Today

Elly writes:

With hundreds of families in a typical school, plus coworkers, neighbors, and other supporters, every group has checks bounce once in a while. Here are two best practices used by parent groups and recommended by nonprofit financial experts.

First, handle these matters with discretion. Especially for a first-time bouncer, no one really needs to know but the treasurer and perhaps the president. Approach the person quietly and directly, explain the situation, and work toward a solution.

As a parent group leader, you have no idea what’s going on at the home in question, and you don’t want to make things worse.

Second, you have a fiduciary responsibility to handle the matter professionally and efficiently. While you don’t want to embarrass or publicly chastise the bouncer, you do have every right to expect payment for the amount of the bounced check and for any fees.

Similarly, you have no responsibility to deliver merchandise that hasn’t been paid for. Discretion doesn’t mean just shaking your head and letting the bill go unpaid.

I’d say that if a person bounces more than one check to your group, then you have every right to stop accepting checks from that person (again, with discretion). If this issue is just too common at your school, think about using a prepay program in which all deliveries are made only after payments have been received (and cleared).