Let’s be blunt – managing your own bank account can be a fairly dull, routine process and not something you want to spend a lot of time on. However it is essential, and a convenient service from a supportive bank will ensure your funds are managed properly and, hopefully, take up very little of your time. Many charities want a quick and easy solution to banking too and we receive regular queries from organisations wanting to make sure they’re picking the right bank account and going about it the right way.
Selecting a bank account is like choosing between mobile phone contracts or holidays: similar products are repackaged in different ways but the chances are one or a few will better suit your needs than the others… you just need to know what to look for. It’s not our place – and nor would we be able – to recommend one bank or bank account over others. What we felt we needed to address, however, was the fact that there was a clear need for a single source of information charities could use to understand what they should be considering and ensure they are asking the right questions. The result is Banking for Charities, a short, impartial guide produced with the British Bankers’ Association (BBA) for the trustees and managers of charities which we’ve launched this week.
Banking for Charities really goes back to basics, which means smaller charities or those just starting up are likely to get the most from it – many of our members who have spent years managing their charity’s banking arrangements might not feel it’s for them. However, we think it’s worth a read regardless of experience or charity size. Recounting the basics can result in some helpful reminders, for example – when did you last make sure you’re not paying tax on interest accrued, or that your bank is handling enquiries and complaints properly?
What we hope the guide will also do, for all charities, is serve as a reminder to step back and consider whether they are getting the most out of their bank. It’s almost a cliché to say now but in these challenging economic times it’s so important that charities are extracting the maximum value from every service they make use of. Charities may not be the banks’ biggest money spinners but hold a sizable chunk of cash in banks – around £18bn – which means as a sector we have a responsibility to our donors to ensure we’re commanding a decent service.
Given their unique set of needs and funding models, banks’ traditional offerings haven’t always been quite right for charities – who are either treated the same as businesses of an equivalent size, or as individuals. However huge progress has been made in recent years, with banks increasingly looking to improve their charity offering. One aspect of this is that banking is becoming more competitive: changes to the account switching process led by the Payments Council (which should be implemented by September 2013) will make it easier for disgruntled individual customers to take their business elsewhere, and despite the additional complexity it’s inevitable charity accounts will go this way too.
It’s worth putting aside a bit of time, regularly, to do a review – however informal – and make sure the bank is still meeting your needs. While the guide may not say anything new to some organisations, we’d urge all charities to use it as a cue to make sure they’ve got the basics right.