Bank accounts for voluntary groups; what can be done?

[Gloster]

One wonders whether it is time to take things up with the Charity Commission who, if I remember correctly, can deal with matters of general policy, rather than just investigate abuses. Whether they have the resources and whether their remit is wide enough to push the matter far enough that it gets taken up in Parliament, is another question. At the very least they might be able to provide guide lines as to what is acceptable for charity offices.

 

[Spamcan81]

From reading this thread it is fairly clear to me that those who are not themselves voluntary organisation treasurers or charity trustees just don't appreciate the practical difficulties and constraints that throw obstacles in the way in practice! Yes it would be great if charity banking was as easy as personal banking but sadly that is just not the reality, with account opening, bank mandate changes and 'two to sign online' being especial pain points in my own experience.

I note in post #5 there is a view that charities should just "simply pay the fees" but put yourself in the position of being the one justifying that in front of fellow trustees and wider supporters...

Such organisations fight for every penny so it is particularly galling to hand over some of that money in the form of bank charges. And then there's HSBC's "customer account review" where you have to prove your organisation isn't into the business of money laundering, drug running and funding terrorists. That is a right pain in the arse.

 

[87 027]

Such organisations don't generally expect free energy, phone calls, internet access, fuel, stationery, postage etc etc. Should banking be any different?

I write as a former charity trustee and treasurer.

A very interesting perspective as we have to pay for all of those things on standard commercial tariffs. It just means that less of the funds we raise are available to fund our core charitable objectives!

 

[PeterC]

A very interesting perspective as we have to pay for all of those things on standard commercial tariffs. It just means that less of the funds we raise are available to fund our core charitable objectives!

Not to mention that you are subsidising the accounts of private individuals

 

[Dai Corner]

A very interesting perspective as we have to pay for all of those things on standard commercial tariffs. It just means that less of the funds we raise are available to fund our core charitable objectives!

It's the argument I would have used had the question been asked back in my day. These days I'd also use it to encourage a move away from cash and cheques in an effort to reduce charges and volunteer workload.

Our Membership Secretary preferred subs by Standing Order he could tick off on the bank statement to cheques he had to take to the Treasurer to pay in or cash handed to him in the street or pub.

Ringing or emailing your co-signatory to ask him to authorise a payment online is easier than arranging to meet him to sign s cheque.

 

[Simon11]

Barclays offer 'dual authorisation' on community accounts but when I visited just before Christmas they had a moratorium on opening any new charity accounts precisely because of the HSBC situation.

My Scout Group, which is one of the largest in the country, operates numerous accounts and because dual authorisation of online payments is a mandatory requirement of the Scout Association nationally, we could be looking at annual bank charges of £750-£1,000 just to have the facility. That's before we've deposited or withdrawn a single penny.

Metro Bank also offer dual authorisation for online payments but charges look particularly horrendous. The facility costs £20 per month unless you open a business bank account then it costs £5 per user. But there is a fee of 30p per transaction and a monthly standing charge unless you can maintain a balance of above £6,000.

== Doublepost prevention - post automatically merged: 10 Apr 2022 ==


If you're referring to the Scouts, the national rules require dual authorisation for online payments and online banking must be cancelled if it allows one person acting along to initiate a payment, even if they undertake never to do so without first getting a second signature on the supporting paperwork. So it may be the only way (other than cash) of reimbursing payments in some cases.

Scouts - Banking

The Scouts requires groups to use bank accounts (POR Rule 3.50). Learn more about banking,

www.scouts.org.uk

I am a Group Scout Leader and we have a number of bank accounts for different sections. The accounts which are the easiest to use but also safer, i.e. view the accounts online and have a credit card, are actually the accounts which actually break the rule of needing two people to sign off payments. As an example:
* One of our sections has a traditional bank account with two leaders needing to approve payments. However, I cannot be added and thus it could be 12-18 months later before we discover via the AGM that money has gone missing...
* One section which breaks the rules, allows me to view their statements via a mobile app and thus, very easy to track and monitor what is happening. We also have the use of a credit card, so when we purchase food for camps it can be done very easily without needing to move money around from scouts to my personal account and all the tracking that goes with it.

I personally think charities should be dropping the need to have two people to sign off payments and instead focus on allowing people to use a normal bank account which then multiple people can access/ view. The rules haven't followed the changes in technology.

It should also be much, much more easier to change people who can view and access charity accounts. Banks seem very happy for ex-trustees to be able to use accounts freely but very, very strict at allowing new trustees to be given access without lots of paperwork and time to sort them! I don't understand why bank don't cross check the charity commission for a list of the trustees and only allowing access for people who are on that list.

 

[Doctor Fegg]

As well as CAF, Triodos are worth looking into - they have products specially marketed at charities: https://www.triodos.co.uk/charity

 

[Dai Corner]

As well as CAF, Triodos are worth looking into - they have products specially marketed at charities: https://www.triodos.co.uk/charity

Not new current accounts though, unfortunately.

Note that we no longer provide current accounts or deposit accounts to new business and charity customers.

Virgin Money do offer 'free everyday banking' for clubs and organisations making less than 10 transactions a month.

Charities, clubs & societies | Business Banking | Business | Virgin Money UK

Business banking from Virgin Money. Enjoy Access To Your Charity's Savings Whenever You Need Them.

uk.virginmoney.com

 

[WesternLancer]

Our church is with the Co-op Bank and they don't charge. Another church switched to them recently from HSBC without difficulty. We have a branch in Derby.

This is interesting because a club I was treasurer (but not a registered charity) of for a while had a long standing Co-Op bank account but they commenced charging about 4 years ago so we closed it as the charges were disproportionate to the volume of funds we had / were needing to deal with.

I can only assume that the status of your church permitted a no charge arrangements that wasn't an option for us.

 

[gg1]

Not to mention that you are subsidising the accounts of private individuals

Not really.

As mentioned earlier in the thread, the free accounts of private individuals are subsidised by the profits generated from loans, credit cards, mortgages, overdraft charges etc paid by private individuals. As voluntary organisation don't tend to take on debt (and therefore generate profit for the banks), there is no commercial benefit to the banks in offering them free banking.

 

[ainsworth74]

And then there's HSBC's "customer account review" where you have to prove your organisation isn't into the business of money laundering, drug running and funding terrorists.

Also a bit rich considering that they were quite happy doing business with all sorts of unsavoury characters and never felt a need to query them on where their ill gotten gains came from or what they were doing with it...

 

[87 027]

Also a bit rich considering that they were quite happy doing business with all sorts of unsavoury characters and never felt a need to query them on where their ill gotten gains came from or what they were doing with it...

To be fair to bank staff on the ground, the Anti Money Laundering regulations have been tightened up further recently and the training I have seen drums home the message that if something dodgy subsequently comes to light, then the individual member of staff is personally on the hook for criminal proceedings as well as the organisation. The only defence for the employee is to show they have followed corporate procedures to the letter at every stage, which clearly puts the kibosh on local discretion being shown.

I can see this from both sides of the fence - as a customer it creates a high degree of friction in dealing with banks whose employees see the need to cover themselves to the nth degree, but I understand what's at stake for them as individuals if someone dodgy slips through the net.

I make no comment on the wider business ethics of the banks as corporate entities, whether they have happily accepted taxpayer bailouts, or taken overseas money and not quite given the full picture (ahem) to stakeholders at the time...

I do worry that voluntary organisations are being pushed towards a 'cash economy' mode of operating because they are increasingly seen by the banks as unattractive customers, whether on risk grounds or uncommercial or both

 

[Bletchleyite]

I am a Group Scout Leader and we have a number of bank accounts for different sections. The accounts which are the easiest to use but also safer, i.e. view the accounts online and have a credit card, are actually the accounts which actually break the rule of needing two people to sign off payments. As an example:
* One of our sections has a traditional bank account with two leaders needing to approve payments. However, I cannot be added and thus it could be 12-18 months later before we discover via the AGM that money has gone missing...
* One section which breaks the rules, allows me to view their statements via a mobile app and thus, very easy to track and monitor what is happening. We also have the use of a credit card, so when we purchase food for camps it can be done very easily without needing to move money around from scouts to my personal account and all the tracking that goes with it.

I personally think charities should be dropping the need to have two people to sign off payments and instead focus on allowing people to use a normal bank account which then multiple people can access/ view. The rules haven't followed the changes in technology.

It should also be much, much more easier to change people who can view and access charity accounts. Banks seem very happy for ex-trustees to be able to use accounts freely but very, very strict at allowing new trustees to be given access without lots of paperwork and time to sort them! I don't understand why bank don't cross check the charity commission for a list of the trustees and only allowing access for people who are on that list.

At the risk of changing this to a discussion on 1st Facebook, anything other than one account per Group under the control of the Group Treasurer is asking for trouble. If Sections need a float, pre paid cards can be used to give a smaller amount.

 

[87 027]

At the risk of changing this to a discussion on 1st Facebook, anything other than one account per Group under the control of the Group Treasurer is asking for trouble. If Sections need a float, pre paid cards can be used to give a smaller amount.

I suspect the reality is that volunteers will just incur expenses personally and be out of pocket until reimbursed. All in the spirit of volunteering...

I looked into prepaid cards for my Group and concluded they had value in specific situations (e.g. currency for overseas trips such as jamborees) but there are drawbacks for more routine use

 

[Bletchleyite]

I suspect the reality is that volunteers will just incur expenses personally and be out of pocket until reimbursed. All in the spirit of volunteering...

No reason it can't be done promptly if you have an account with dual auth BACS. I would just go with CAF and pay the fees, they have a charity dedicated product which is designed for charities. Split between your members the cost is small. Trying to go cheap with this is like insuring with companies other than Unity (Scout Insurance Services) and being surprised when it doesn't pay out.

 

[PeterY]

I do worry that voluntary organisations are being pushed towards a 'cash economy' mode of operating because they are increasingly seen by the banks as unattractive customers, whether on risk grounds or uncommercial or both

I'm a treasurer for a small 12 step group. It's not vast amounts of money by any means but we still use cash. We have discussed blank accounts and even a card reader but the hassle . We like to keep things simple. My job is make make sure our rent is paid and any surplus goes up the the next level of the organisation once every 3 months. I do keep a written record though.

 

[The exile]

Am currently involved with shifting the accounts for a group (non charity) of which I am treasurer from HSBC to Metro Bank. A small organisation is likely to remain under the free transactions threshold ( we would be delighted to come in over them!). It was a long process to jump through all the initial hoops - but apart from one phone call and a quick trip into branch to set up online banking that was that - all sorted. We have a branch almost opposite HSBC and I can now do in-branch transactions at times that actually suit volunteers who work office hours - something that hasn't been possible at HSBC for several years.

 

[plugwash]

for which they pay no interest, but can earn central bank rates of interest.

Afaict over the last decade or two deposit banking has been feeling the Squeeze. Prior to the 2008 financial crisis the bank of england base rate was hovering around 5%, by Febuary 2009 it had dropped to 1% and it has remained at or below that level ever since. At one stage during the covid pandemic it was down at 0.1% and there were even threats of negative interest rates. The EU also placed a cap on card interchange fees, which were another major source of income for banks.

For individual customers, deposit banking is an opertunity to cross-sell other more profitable services, but I suspect that applies much less to orginisational banking.

 

[DelayRepay]

To be fair to bank staff on the ground, the Anti Money Laundering regulations have been tightened up further recently and the training I have seen drums home the message that if something dodgy subsequently comes to light, then the individual member of staff is personally on the hook for criminal proceedings as well as the organisation. The only defence for the employee is to show they have followed corporate procedures to the letter at every stage, which clearly puts the kibosh on local discretion being shown.

I can see this from both sides of the fence - as a customer it creates a high degree of friction in dealing with banks whose employees see the need to cover themselves to the nth degree, but I understand what's at stake for them as individuals if someone dodgy slips through the net.

Worth adding (as someone who works in banking) that there have been examples of fictitious charities and organisations being set up specifically to launder the proceeds of crime and, in some cases fund overseas terrorist groups. This type of account was always an 'easy' option for criminals due to the general lack of paperwork (especially for non-registered charities and unincorporated groups). The current rules may appear excessive but the banks are simply implementing the standards required by regulators and law.

== Doublepost prevention - post automatically merged: 12 Apr 2022 ==

Afaict over the last decade or two deposit banking has been feeling the Squeeze. Prior to the 2008 financial crisis the bank of england base rate was hovering around 5%, by Febuary 2009 it had dropped to 1% and it has remained at or below that level ever since. At one stage during the covid pandemic it was down at 0.1% and there were even threats of negative interest rates. The EU also placed a cap on card interchange fees, which were another major source of income for banks.

Another thing to bear in mind is the cost of providing various services. For example, the bank will look at the cost of providing a branch network based on the number of transactions, or the cost of providing cheque clearing infrastructure based on the number of cheques processed. As these 'old fashioned' ways of banking become less popular, fewer customers are using them therefore the cost per transaction increases.