It’s hard to do anything in the real nonprofit world without a bank account. Luckily, the process is pretty easy once you’ve formed a legal nonprofit organization with the state you live in, and completed all the subsequent registration forms and filings with the IRS and other entities ( check out our nonprofit getting started guide for more info ). Though there are a few things to consider first…
What bank should I choose?
Choosing a bank feels like a permanent decision, but it doesn’t have to. Your needs now are probably pretty different from what they will be in a year or two, so right now you just need something to get going. Don’t worry if there are limits to the number of deposits you can make or checks you can write – they will probably be fine for the amount of volume for your first couple of months. And if your banking needs change, you can always change banks or upgrade your account later on.
What documents do I need to open the account?
You need a bunch of them. Best practice is to use a Dropbox or GoogleDrive to save .pdf copies of all the registration documents you’ve gotten so far. You can also keep copies in a Corporate Documents file folder. Typically they’ll ask to see your Articles of Incorporation, which you created when you registered the organization with the state, your EIN, which you got from the IRS, and proof of your nonprofit status, which is either from the IRS or from your state tax authority. Plus a drivers license. Side note – you’ll need regular access to all your corporate docs for grants and other proposals, so keeping them organized from the beginning will pay off down the road.
From here, there are two options that work best:
Choose a big national bank that has free nonprofit checking
Most of the time I check out the big national banks online ( Bank of America, Chase, US Bank, etc ) to see which ones offer a free checking account option for nonprofits. The benefits here are that they will all offer similar online banking access, usually with billpay, free debit card, and the have easy connections to other online services. And free. Drawbacks here are that big banks haven’t always done the best things for our communities or the humans that live there.. and the profits and lending don’t stay local. But free and easy is a pretty compelling argument when you’re getting started.
Choose a local community bank or credit union
It is a good long-term strategy to develop a relationship with a local community bank or credit union, and having your checking account there is a good start. Benefits here are primarily relationship building – which may pay off later with local support grants or sponsorships, and the brand value generated from being a locally-minded organization. Drawbacks are that it probably won’t be free, and your options for online banking and billpay will vary a lot from bank to bank. But if the benefits of being local are important to you, this can be the way to go.
Regardless of what bank you end up going with, once you have a checking account for your nonprofit you’re ready to really dig in and start making a difference in your community.