Opening a bank account

What the bank will ask for

Requirements vary, but most banks ask for the following.

• Articles of incorporation stamped or approved by the state
• The EIN confirmation notice
• Bylaws
• A board resolution authorizing the account and naming authorized signers
• Identification for each signer

You do not need your IRS determination letter to open an account. Some banks offer nonprofit accounts with reduced fees once you have it.

Set up controls from day one

Small organizations are most vulnerable to loss from a single person controlling all the money. A few controls cost almost nothing.

• Require two signers or two approvals for payments above a set amount.
• Have someone other than the person who writes checks review the monthly statement.
• Deposit all donations intact, without paying expenses out of cash received.
• Use the account only for organization business, with no personal expenses and no loans to insiders.

Keep records the board can read

Use bookkeeping software or a simple ledger from the first transaction. Record every deposit with its source and every payment with its purpose. The treasurer should present a short financial report at each board meeting. These records will feed your annual return, your grant applications, and any audit.

Payment processors

If you accept online donations, the processor will deposit into this account. Make sure the account name matches the legal name of the organization so donor receipts and bank records line up.