Nonprofit associations, like businesses, generate revenue and expenses. It is essential for nonprofits to maintain a bank account to properly account for these activities. Fortunately, it is not too difficult for a nonprofit to open a bank account. Only a few documents and a trip to the bank chosen by the organization are required.
Form a corporation with the state in which the nonprofit will conduct business. A nonprofit may apply for tax-exempt status, and this status is granted by the Internal Revenue Service, not the state where the organization is formed. Generic articles of incorporation or organization are created when you form the entity, but you may draft more individualized rticles if you wish and file them as an attachment to your business formation documents.
Read More: How to Change a Corporation From Nonprofit to Profit
Apply for an Employer Identification Number (EIN) from the IRS. You can apply for an EIN online on the Internal Revenue Service website. After your application is submitted, you’ll receive the EIN instantly.
Apply for nonprofit status with the IRS. After your corporation and EIN have been established, you may complete and submit IRS Form 1023.This form requires information about the nonprofit’s business structure and formation, its officers and its financial arrangements. You’ll also provide information about who will receive benefits from the organization and the activities of your nonprofit.
Gather official organization documents required to open your bank account. Standard documents to open a nonprofit account include a copy of your nonprofit’s articles of incorporation, articles of organization or charter, and a copy of the Employer Identification Number issued by the Internal Revenue Service. These documents show when your organization was formed with the state and prove your organization’s tax identification number.
Gather information about the organization’s officers. These documents include an official list of all officers and government-issued identification for each officer. Official officer listings may be found in your nonprofit organization documents filed with the state. Banks typically require this information for each officer, even if an officer will not make deposits and withdrawals from the account. Providing a photo ID and Social Security card for each officer is standard, but some banks may also require an additional form of ID.
Select a bank. Most national banks offer accounts specifically for nonprofits, but you may also find smaller local banks or credit unions that offer nonprofit products. Review the websites of banks in your area to get information about fees, minimum balances and benefits available to your organization.
- U.S. Bank: Checking Accounts for Nonprofits
- Lower East Side People's Federal Credit Union: How to Open a Non-Profit Account
- Internal Revenue Service: Life Cycle of an Exempt Organization
- Internal Revenue Service: Apply for an Employer Identification Number (EIN) Online
- Internal Revenue Service: Form 1023