Setting up a Bank Account

Chapters and SIGs that receive funds from memberships, donations, or events will want to set up a bank account for depositing funds and making payments. Here is a summary of the steps that most Chapters and SIGs will need to follow and some helpful hints to simplify the process.

Pass Board Resolution to Open a Bank Account

Your Chapter or SIG board should pass a resolution authorizing the Treasurer to open a bank account. Do not include the name of the bank in the resolution. The resolution should include the titles (not the names) of the officers who are authorized to be named on the account. It should include at least your Treasurer and your Secretary. The board may also wish to include the President. Your Treasurer will need a printed copy of this resolution signed by the Secretary to open a bank account.

Here is a sample resolution:

Sasquatch Valley Costumers Guild
Board of Directors Resolution [RESOLUTION NUMBER]

Resolved:

The Board of Directors of the Sasquatch Valley Costumers Guild hereby authorizes the Treasurer to open one or more accounts at such banking institutions as the Treasurer deems necessary for the purpose of managing the funds of the organization. The Treasurer, Secretary, and President of the organization shall have signature authority for the accounts.

Approved by the Board of Directors this [DAY] day of [MONTH], [YEAR].

Attested:

[SIGNATURE OF RECORDING SECRETARY] Recording Secretary, Sasquatch Valley Costumers Guild
[MONTH] [DAY], [YEAR]

Get Proof of ICG Affiliation

U.S. banks require a Chapter or SIG to establish itself as a unit of a 501(c)(3) non-profit to be eligible for treatment as a non-profit for banking purposes. Once the ICG Board has approved your Chapter or SIG application, ask the ICG Corresponding Secretary (icg-corr-secretary@costume.org) to issue a signed letter stating that your group is an affiliated Chapter or SIG. If your group participates in the ICG’s Group Exemption Letter (GEL), it may be able to use the Participating Chapters and SIGs document on the ICG website instead.

Apply for a Taxpayer ID

All U.S. banks require an organization to have a Taxpayer ID issued by the U.S. Internal Revenue Service. Banks in most other countries have similar requirements. In the U.S., it is know as a Employer Identification Number (EIN).

Applying for an EIN is easy and can be done online by visiting this IRS webpage. You will receive an EIN at the end of the application process. Save a copy of the page that shows the new EIN in PDF format as part of the Chapter or SIG records maintained by the Secretary.

Set up a Bank Email Alias

The online banking feature of your account will require an email address. Never use a personal email address to set up a Chapter or SIG online banking account. Instead, set up a special email alias on your web hosting account for use with online banking account (e.g. bank@sasquatchvalleycostumers.costume.org).

We strongly suggest that the authorized signers be on this alias and know the password and any security information for the online banking account. See Getting Online for information on setting up a web hosting account and email aliases.

Shop for a Bank

It is critical to shop for a bank that is “friendly” to non-profits. As a unit of a 501(c)(3) non-profit organization, your Chapter or SIG is entitled to be treated as a non-profit for banking purposes. You should visit as many banks in your area as possible and ask at least the following questions of each of them.

  • Does your bank have a special program for non-profit organizations?
  • Does your bank charge a monthly fee to maintain a checking and savings account? if so, what is required to have the monthly fee waived?
  • Does your bank offer online banking? If so, is there a fee?
  • Does your bank provide a debit card? If so, is there a fee? Is there a fee for using the card at merchants? Is there a fee for using the card at an ATM machine?
  • Does your bank charge a fee for writing cheques? Is there a limit to the number of cheques per month?
  • Does your bank charge a fee for depositing cash or cheques? Is there a limit to the number or amount of deposits per month?
  • What is the process for adding and removing officer names on the accounts? Can named officers who do not live near this branch go to a different branch to be added?
  • How many months of inactivity will result in the account itself or online access expiring? Does logging in to the online account count as activity for this purpose?

Ideally, your bank should not charge a monthly fee for the most common kinds of activities, including maintaining accounts, having or using an ATM card, accessing yor accounts online, and making deposits of cash or cheques. Most banks will require both a chequing and savings account to avoid common fees. It is not uncommon for banks to charge a fee for writing cheques, but some banks, especially regional ones (e.g. Bank of the West), can waive this fee. Some banks also advertise limited time promotions with better terms. Look for these and take advantage of them.

Your best bargaining position is before you open the account, so don’t be afraid to ask for waivers of fees and let the branch manager know that you plan to select a bank soon. Get the branch manager’s card and give her or him a Chapter or SIG business card showing your officer role. Try to work with the same person when you open the account, even if you need to make an appointment. In banking, personal relationships are important.

Open the Account

When you visit the bank to open an account, make an appontment with the branch manager or whoever you spoke with, and bring the following:

  • IRS ruling that the ICG is a 501(c)(3) non-profit organization (available on the Financial Statements page of the ICG website).
  • Letter of Chapter or SIG affiliation, signed by the ICG Corresponding Secretary, or the GEL Participating Chapters and SIGs document on the ICG website.
  • Document from the IRS with the Chapter’s or SIG’s EIN.
  • Chapter or SIG bylaws, signed by the group’s Secretary.
  • Chapter or SIG officer election results, signed by the group’s Secretary.
  • Chapter or SIG board resolution signed by the group’s Secretary, authorizing the Treasurer (not the current office holder) to open a bank account. Do not specify which bank in the resolution. The resolution should also specify which officers (not the current office holders), can be on the account.
  • Funds to deposit sufficient to avoid whatever fees you want to avoid.

The bank may not require all of these, but it does not hurt to have them just in case. The bank will either make copies of these documents or ask you to give them the copies you brought for their files. It is best to have all Chapter or SIG documents printed on your group’s letterhead. Most word processor programs provide attractive letterhead templates that you can customize. We suggest having your Secretary develop a letterhead template for your group.

Be sure to use the Chapter or SIG EIN on the account. Never use personal SSNs of the officers who will iniaitlly be on the account, or the EIN of the ICG. If your Chapter or SIG has a P.O. Box, that can be used as the address on the account. Otherwise, use the home address of the Treasurer. It would be helpful if all those who are authorized on the account accompany you on this visit, or you will need to arrange for them to be added later.

If your group plans to write cheqeues, you can order them now, or wait until closer to the time actually need them. Some banks will print a small number of blank cheques on your account to use until your order arrives at no charge. It never hurts to ask. If your group plans to bank online, give the bank the group’s banking alias, rather than a personal email address.

Maintain the Account

If the bank issues a debit card for the account, request that the name on the card be the name of the Chapter or SIG, rather than the name of the current Treasurer. This will avoid having to request the bank to reissue the debit card when the Treasurer changes.

The Treasurer should file away copies of all bank statements. To avoid having to store paper, it may be best to sign up to receive online statements, and download them as they become available. Banks generally make statements available online for up to a year.

The Treasurer should ensure that the accounts balance at the end of every statement period, and correct any discrepancies promptly. If your Chapter or SIG uses financial software like Intuit Quicken or Quickbooks, your bank may enable you to download transaction information directly into the software. Ask the bank about this option. Chapters and SIGs who participate in the ICG’s Group Exemption Letter receive a free copy of Quickbooks.

When the officers holders who are on the bank account change, the Treasurer should promptly arrange to remove those who no longer hold office as signers on the account, and add new officer holders to the account.