Opening a Non-Profit Checking Account
Any chapter that collects dues should have a bank
account to store chapter funds. In addition to providing
improved security, chapters will need to write checks to
pay vendors for T-shirts, patches, etc.
It also allows members to make out their yearly dues
check to the club instead of to an individual.
The Treasurer will need to setup the non-profit
checking account for the club. This is a simple process
but following the guidelines and suggestions below can
avoid duplicate trips to the bank...and save money.
1. Choose a bank
Don't assume that your personal bank is the best
option. Identify several banks that have multiple
branches within the club's
membership area to insure that Treasurers who are elected in the
future also have easy access to a local branch.
Banks typically require a minimum initial deposit to
open a checking account but most will waive this
requirement for Non-profits in addition to providing
free checks. If they don't, go to the next bank on your
2. Obtain an EIN
To open a non-profit checking account, the bank
will require either a personal SSN or an EIN (Employer
Identification Number). For obvious reasons, it is
not recommended to use someone's personal SSN.
Before going to the bank, get an EIN number for your
club. Obtaining an EIN number is free, quick and
easy. The online application takes several minutes to
complete and your EIN number will be provided instantly
upon completing the form.
To make the application process simple, screen shots have been provided
illustrating what options to select. review the sample form and then apply
by clicking on the link below.
>> View sample
>> Apply for an Employer Identification Number (EIN)
3. Bring a $50 Deposit
Banks require a minimum deposit to open a checking
account. Most banks will waive this requirement
for non-profits but you will still need an initial
deposit to open the account. $50 collected in dues
should be sufficient.
4. Decide how many signatures are required
Before opening an account, the club should decide (by
popular vote) how many signatures are required for checks. It is
typical for non-profit organizations to require two
signatures on each check with all four officers being
authorized signature bearers. This check-and-balance
system insures good accountability for the club's funds
and insures that a check can still be signed if one or
more officers are not present at the meeting.
For each authorized signer on the account, the bank will provide an
"Authorized Signature Card" to be filled out and signed by each officer.
The Treasurer can fill his out at the bank and the rest can be taken to the
next meeting, filled out and returned later.
TIP: When offered four signature cards, ask for eight or 12 to
avoid a trip the following year when new officers are elected.
NOTE: In additional to photocopying the Treasurer's driver's license
at the bank, they will typically ask for a photocopy of the other three
officer's driver's licenses in addition to the signature cards. If the
signature cards for the other three officers are returned without a
photocopy of their driver's license, they typically don't say anything. (The
signature card has all of the necessary contact information and their
signature. In the event of a discrepancy or issue, the bank simply needs a
signature on file to compare with the signature on the questionable check.)
For the bank's purpose, the club's address should
always be the home address of the Treasurer. This
is where the bank statements will be mailed and who the
bank will call if there is an issue. When a new
Treasurer is elected, he or she will need to fill out an
"Account Change Request Form" to reflect the club's new
address so future bank statements are mailed to the new
If asked nicely, banks will typically provide the
club's initial checks for free. Bear in mind that there
are checks specifically designed with two signature
lines if this is the option your club goes with. The
bank will offer
a selection of styles ranging from a standard
checkbook to three-checks-per page (which needs a 3-ring
binder). There is also an option to have
carbon-copy checks, too. Purchasing checks can be
costly for a start-up chapter so be persuasive and
prepared to "take your business elsewhere" if they do
not offer them for free.
Be sure to ask for a free zipper-up bank bag to keep
your checkbook, cash, change, checks received, pens, and
"whatever else" together.
The Treasurer is responsible for maintaining a current balance of the
club's funds. Given the propensity for hard drive failures and viruses, a
computer-based ledger is not recommended. Additionally, Microsoft
Money, Quickbooks and similar software may impose technical challenges for
Google Docs - If a digital ledger is preferred,
Google Docs offers a free online spreadsheet application
very similar to Microsoft Excel that would be preferable
to a PC-based solution.
A Google Doc spreadsheet
ledger is automatically mirrored across multiple servers
providing "automated backup". Data cannot be lost
due to PC failure or viruses. It offers version control
that avoids "overwriting" or "accidentally deleting"
information and balances can be viewed online by anyone
with permission to access the balance.
Click here to view a bank account ledger template
that auto-calculates the balance.
Watch these videos for more information:
About Google Docs,
It is a good practice for the club to perform an
audit at the end of the year. Ask for two volunteers to
review the Treasurer's ledger and receipts to insure
that everything is in order and that the balance is
correct before handing off the books to the next
Non-Profit Associations do not need to file taxes on revenue
earned so long as that revenue does not exceed a
state-specified amount. As an example,
Pennsylvania only requires tax filings for non-profits
earning more than $2500 / year. Check with your
local tax office to determine your state's requirements.
Since Membership dues are collected by the Treasurer, the Treasurer may
also be designated responsible for maintaining the current membership
count and membership list. To maintain a historical
record of the club's growth, the Treasurer (or another officer) should report on the current membership
count at the beginning of each meeting so it can be
reflected in the minutes.
Have a suggestion or tip that can be added?
Contact the webmaster