Owning a nonprofit organisation can be quite tricky in several aspects. One of the biggest, and probably the most important is finances. Specifically, which bank you use to manage your finances. Since there are many different options, each offering a different experience, it might be very hard to find the right one for you. That’s why we made this list of some of the best banks in this category, where we highlight both the pros, and the cons of each one.
Why do nonprofits even need banks?
As you should know, a nonprofit organisation is defined as a “organisation that doesn’t generate profit for it’s owners”. This, however, doesn’t mean that these organisations don’t earn money. Quite the contrary. Some nonprofits can generate even millions of dollars every year, they just have to make sure that this money is spend on the organisation’s goal.
This is where banks come in. It is basically impossible to manage finances for a whole organisation without some form of a bank. Very rarely would you find a nonprofit organisation, that doesn’t have a dedicated nonprofit bank account. These accounts are used not only to invest into the nonprofits goal, but also to collect their revenue, with which they pay their vendors and sometimes even their employees.
What to look for when choosing a nonprofit bank?
There are things, that most people don’t need to consider, which can make or break a deal for nonprofit organisations. Let’s look at some of them
When you have to carefully manage every single penny, of course you want to loose as few of them in the transaction as you can. Since a nonprofit cannot generate profit, you want to reduce unnecessary expenses as mush as possible. Whether it’s transaction, or withdrawal fees, you have to be careful, so you don’t have to give half of your money to the bank.
Dedicated nonprofit account
While it’s true that a basic business account can work for you, it’s always better to have an account specifically designed to work with nonprofits. Many banks offer an option for such accounts. These accounts have some specific benefits, like a certain amount of free transactions per year. Of course you have to prove that you are a nonprofit organisation.
Investment in your nonprofit mission
If you are a mission driven nonprofit, you might also look for a bank that believes in your mission. While this is usually a small point, some people might be dissuaded from a bank, if said bank goes against their ideals.
Now that we got those point of of the way, let’s look on some of the best bank options for your potential non-profit organisation:
1. Wells Fargo
And let’s start this list big with Wells Fargo. We already mentioned this bank in this list. Not only is Wells Fargo one of the oldest companies in the USA, being founded all the way back in 1852, it’s also the second largest bank.
It was formed by the same people that founded the American Express, which we already talked about. Thanks to the gold rush era, Wells Fargo had a great opportunity in front of them, and they sure took it. Thanks to the express delivery services of American Express, it was able to deliver the gold faster, and even cheaper than the standart US mail service.
When it comes to nonprofits, Wells Fargo offers many different bonuses. Most of them, however, are more suited for smaller organisations.
Wells Fargo offers access to about 12,000 ATMs all over USA. They also have reach all over the USA. But they offer a fairly small amount of free monthly transactions (only 100). That’s fine if you’ are’re the only person using the account, but can sting if you make dozens of transactions every day. They also charge a monthly fee, which might be bad for some nonprofits.
While not being as big as Wells Fargo, Truist is linked by many as one of the best banks for nonprofit organisations. Their nonprofit account offers some of the best perks out of all the banks on this list. For example, they charge no monthly fees and have no transaction limit. But, because they charge no fees, they have no APY either.
They also offer 225 free monthly transactions (more than double of Wells Fargo). And even if you surpass this limit, they charge only 35 cents per each transaction above this limit. Withdraws and deposits from their ATMs are free, while out-of-network charges are $3 domestically and $5 internationally, plus third-party ATM fees.
The biggest downside to this bank is that it only has reach in 15 states and Washington D.C. in the south and southeast. This, on itself, wouldn’t be that big, but keep in mind that you need to visit their branch to open an account.
3. U.S. Bank
If you have a nonprofit, whose revenue is highly irregular, U.S. bank might be the best option. This is mostly because they strive away from monthly transactional limits. Instead, they offer an annual limit of 1,800 transactions per year. This makes U.S. Bank perfect for a nonprofit, which get their funding from occasional, but large fundraisers. You can also deposit up to $30,000 in cash for free each year, or in 300 transactions, whichever comes first.
Because of their annual limits, U.S. Bank can also be immensely helpful for one-time massive fundraiser events. Even if you want to run several big fundraisers per year, their annual system is much better than the monthly ones of other banks. Since, if you make no transactions in one month, and then 500 the next, other banks will charge you for more than half of them.
4. Bank of America
While Bank of America might not have a dedicated nonprofit account, their regular Fundamentals Business Checking is a good option regardless. It has waivable monthly fees with up to $7,500 in free cash deposits each month. While it might not be as good as Truist or the U.S. Bank, Bank of America makes up for this by being accessible almost everywhere in the USA.
You can also upgrade your account, earning more free monthly transaction. They also offer several ongoing rewards to incentivise you to stick with them. If you use their business credit card, you can earn many different rewards, like a higher interest rate on your savings, or a bonus to your credit card limit.
Bank of America is probably the best bank for just starting nonprofits, which might experience future growth. If you have an idea, but don’t know how big it’s going to get, then Bank of America is probably your best choice.