For any charity, the point at which they open their own charity account can be an important milestone. It not only makes financial management easier but can also help to provide legitimacy, transparency and reassurance for donors. All banks and building societies are legally required to carry out their own checks before opening any accounts in order to ensure that the organisation is genuine and has proper governance in place. This means that charities have to prepare a thorough set of documents before they can apply for a charity bank account.

This article explains some of the most common documents you are likely to need in setting up a charity bank account or savings account, as well as outlining why they matter and how they might differ depending on the type of organisation involved.

This guide is for general information purposes only and does not constitute financial advice. You should always confirm your requirements directly with your chosen provider.

Why documentation is required

When you set up a charity bank account, you will be asked for a number of different documents. This is largely for regulatory compliance, as banks and building societies need to follow anti-money laundering (AML) and Know Your Consumer (KYC) regulations. There is a possibility that a charity could be misused in order to channel illegal funds and so providers have to confirm the legitimacy of the organisation before they can open an account in its name.

The documents are also required for fraud prevention purposes. By providing identification and governance documents, it is more likely that only authorised trustees will have access to the account. This can help to protect the funds of the charity and adds an important layer of accountability to prevent fraud or misuse

A verified account in the charity’s name will help to build trust and give donors the necessary reassurance that their money is being properly managed. In order for this public confidence to be justified, providers need to do thorough checks before they allow accounts to be opened.

Paperwork is also very important in any audit trail. The documentation provided to the bank or building society will help to create a clear record of who has financial responsibility and authority for the charity. This will help charities and organisations to demonstrate their accountability to the Charity Commission and HMRC.

Proof of charitable status

In England and Wales, charities who have an annual income of over £5000 must register with the Charity Commission. They will then be given a registration number which is often the most straightforward way of proving their charitable status. In Scotland, the equivalent is the office of the Scottish Charity Regulator (OSCR) number, and in Northern Ireland, registration is through the Charity Commission for Northern Ireland (CCNI).

There are some charities which may not appear on the register. These include excepted charities which are made up of some church organisations and scouts or guides groups, as well as exempt charities, including certain schools, museums and universities. In these cases, the provider may ask for a charity reference number from HMRC in order to confirm that the organisation is treated as charitable for tax purposes.

This proof of charity registration is essential as it confirms that the organisation exists legally and is subject to regulation whilst operating for the benefit of the public.

If the charity is new or falls into an exempt category, then you may be asked to supply a trust deed, constitution or memorandum and Articles of Association. These documents will set out the charity’s objectives and operating rules to help the provider verify its legitimacy.

Identification for trustees and signatories

As the trustees and account signatories will have control over the funds of the charities, it is essential that banks confirm their identity and address. They will require a valid photo ID, such as a current passport or photocard driving licence. Other options may include a European Economic Area (EEA) ID card, or a residence permit.

Proof of address will also be required and accepted forms are usually a recent utility bill, bank statement or council tax bill dated within the last three months. Some providers may also accept government correspondence, such as letters from HMRC.

It is important to understand that every individual who will have access to the account or be listed as a trustee will need to provide these identification documents. For larger charities, this can mean gathering identification documents for multiple people and so it is essential that you are prepared in order to avoid any delays.

Governing documents

Banks and building societies are also likely to want to see the governing documents of the charity or organisation. These are the legal documents that set out how the charity is structured, what its purpose is and how its decisions are made. This might include the constitution of the charity, which is most common for unincorporated associations like small community groups, and will outline the objectives, membership rules and financial controls of the charity.

A trust deed is another type of governing document that is used by charitable trusts to set out the trustees’ powers and responsibilities. The provider might also want to see the Articles of Association that are often used by charitable companies. These define how the directors or trustees run the organisation. An older format of governing document is a memorandum, which is sometimes still in use and accepted by most providers.

Banks will often want to see the operational rules documents that specify how funds should be handled, including whether trustees must jointly authorise payments. The banks will use this to confirm that the proposed account setup aligns with the charity’s internal rules. The bank will also want to see any authorisation clauses, as some constitutions might explicitly state who can open and operate a bank account. The bank will want to check this wording before approving any application.

Authorisation and resolutions

A charity is not normally able to open a bank account or savings account without a formal decision from its governing body. Documents in this category can include the minutes of a trustee or committee meeting that clearly state trustees have agreed to open an account with the chosen provider. You could also supply a formal resolution that names the authorised signatures who are permitted to operate the account. This will often include specimen signatures for the bank to keep on file.

They may also need signatures from governing members. This will depend on the structure of the charity, but all trustees, directors or committee members may need to sign the resolution in order to confirm agreement.

Additional supporting information

In addition to the core documents, some providers are likely to ask for supplementary details in order to help them understand how the account is going to be used. They might ask for charity contact details including a physical address, email and telephone number for the charity. It is important to note that some providers will not accept a PO Box address alone.

Banks or building societies may also request an estimate of transaction volumes and types, such as whether the income is likely to come primarily from donations, grant funding or membership subscriptions. In order to meet anti money laundering rules, providers are also within their rights to request a breakdown of where the charity expects its income to come from. This will mean outlining whether it is sourced from local fundraising, government grants or legacy donations.

Preparing your charity account application

There is a lot of organisation and preparation required in order to open a charity bank account and/or savings account. Any charity should spend time gathering all their core documents in advance so that they have a proof of charitable status, identification, government documents and formal resolutions ready to supply to the provider. It is also important to understand the providers specific requirements as each bank or building society will interpret the rules slightly differently. This means putting together a checklist before you begin so that there are no unexpected requests that could lead to a delay in opening the account.

It is also important for charities to double check all of their authorisation agreements. This means ensuring that trustees have formally agreed who is going to act as a signatory on the account and that this aligns with your governing documents.

Opening a charity bank account or savings account is not something that happens overnight, so organisations need to allow enough time for their application to be processed. This tends to take longer than opening a personal bank account, particularly if there are multiple trustees involved, so having everything ready can ensure the process is as quick and smooth as possible.

Disclaimer: This article is for information purposes only and does not constitute legal or financial advice. Mansfield Building Society does not provide advice on the suitability of Charity savings accounts. Please consult a qualified professional to ensure any trust account meets the needs of your trust and its beneficiaries.