New voluntary organisation banking guide is a welcome step forward

A growing problem faced by charities and voluntary organisations – especially small and unincorporated ones – is an increasingly inflexible attitude from banks, which stand accused of not understanding charities and forcing processes onto them which are more suited to large commercial organisations. 

A report published earlier this year by the Institute of Chartered Accountants in England and Wales (ICAEW) claimed that ‘charity banking obstacles’ had reached ‘crisis point’, citing a number of issues ranging from the reluctance of some High Street banks to provide services to charities, through the problem of banks abruptly closing charities’ accounts for supposed ‘compliance risk’, to difficulties in transferring money abroad for charities which operate internationally.

Much of the blame for poor customer service was laid at the absence of personal relationship managers in banks, alongside badly-designed forms which do not provide opportunities for charities to explain their unique situation.

Faced with this stinging criticism, UK Finance, one of the trade associations for Britain’s banking and financial services sector, has published a Voluntary Organisation Banking Guide, which is promising impartial help with the process of opening and managing bank accounts for charities and other voluntary organisations.

Available on UK Finance’s website and also as a downloadable PDF, the 17 page guide offers a questionnaire to help charities identify their banking needs, and then provides details of 13 different banks, filtered to suggest those which best meet those specific needs.

Helpfully, this also identifies those banks which specialise in the not-for-profit sector, and those which offer benefits such as free banking, dual authorisation facilities and online mandate changes.

The guide also offers a checklist for organisations seeking to open an account, listing the various documentation, information and identity requirements so that these can be collated in advance.

The rest of the guide covers the maintenance of an existing charity account, covering such areas as amending personnel and contact details and changing account usage.

This is all very helpful, and a good step in the right direction.  However, it doesn’t solve the fundamental problem, which is that too few banks provide their staff with training on the particular needs of charities and voluntary organisations, with the result that they too often expect them to act more like large corporate bodies rather than the small, volunteer-run entities that many of them are.

Let’s hope that the engagement of the banks in creating that guide will be the start of a process which will improve that underlying situation.