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As the board of a newly formed charity, we’re looking to set up a bank account but don’t know where to start. Are you able to help?
As a trustee it’s a vital governance responsibility to ensure the safe stewardship of your organisation’s assets. Many banks and building societies offer special current accounts for voluntary organisations and charities, and most give free banking if the account is in credit.
And it’s important to consider looking beyond the high-street banks. There are also some smaller banks which specialise in running accounts for community groups and charities. While some might not be household names, they’re still worth looking at as they generally have an arrangement which allows you to manage your account at a high-street bank.
You need to choose an account which offers the services your organisation needs. Find out about charges and processes, eg how do you change a signatory? Check if the account requires a high minimum deposit which may be of no use to very small organisations. It’s also important to consider whether your account offers online dual authorisation. To protect against fraud, any online payments should be approved by at least two people for additional security.
And what about ethical banking? Should your banking policy reflect your charitable objectives? Should you consider your bank’s social and environmental stance? Determining ethics can be difficult as it can be subjective, but it is something to consider. A good place to start can be to look at your mission and then try to ensure your bank’s practices don’t run contrary to that.
High street banks special accounts for charities can be tempting for the convenience of using a bank you know. But it’s important not to just go with one of the big banks that you recognise, or bank with personally.
Benefits vary, and change over time, so it’s important to keep check on the details of your bank account and whether it is worth changing if there is a better offer available.
If you need more information, OSCR has some great guidance on Banking for Charities and SCVO’s updated charity bank account comparison table will be published in the TFN Guide to Running A Charity or Social Enterprise 2018, out in November.
This month’s solution was provided by the Scottish Council for Voluntary Organisations information team