Free Business Checking for Non-Profits ?

[lynca]

I have run a non-profit 501(c)3 account for the past 3 years with WaMu (now Chase) to handle business checking. Typically the monthly service fee has been zero but recently that has changed.

Now Chase has added monthly service fees if a $5,000 account balance is not held. This is unfortunate because non-profits rarely have $5,000 sitting around every month. Does any team or group use a national bank with a zero monthly service fee ?

[Cynette]

Does it need to be a national bank? Many of the small non-profits around here use the local credit union.

[Micah Chetrit]

may I ask about how many robotics teams have a 501 c 3? We don't know if it's a good idea to do the work...Students think so, Adults don't think so. what is your experience?

[Daniel_LaFleur]

Originally Posted by Micah Chetrit

may I ask about how many robotics teams have a 501 c 3? We don't know if it's a good idea to do the work...Students think so, Adults don't think so. what is your experience?

Many teams (including mine) are 501(c)3 non profits.

Is it right for you? well, that depends ...

While it does make it easier to gain corporate sponsorships, it also can cause a rift between the team and the school as the school cannot be a 501(c)3 ... but a booster club can be.

My suggestion is to talk it out with the adults and find out their reasoning for their concerns (and they most likely will have many valid ones).

From there you will need to decide if you still wish to persue a 501(c)3, in which case you would have to alleviate the adults concerns.

[RoboTigers1796]

Originally Posted by Daniel_LaFleur

Many teams (including mine) are 501(c)3 non profits.

Is it right for you? well, that depends ...

While it does make it easier to gain corporate sponsorships, it also can cause a rift between the team and the school as the school cannot be a 501(c)3 ... but a booster club can be.

My suggestion is to talk it out with the adults and find out their reasoning for their concerns (and they most likely will have many valid ones).

From there you will need to decide if you still wish to persue a 501(c)3, in which case you would have to alleviate the adults concerns.

Schools are 501 c 3 non profit organizations under the dept of ed from my understanding

[IndySam]

Some schools (like ours) have a foundation that has 501(c)3 status. This is what we use if we get a donation that requires that status.

[ebarker]

Originally Posted by RoboTigers1796

Schools are 501 c 3 non profit organizations under the dept of ed from my understanding

Public schools do not fall under the 501c3 tax code but are a different type of entity.

A 501c3 is a non-profit corporation that exists for a different class of purposes.

Often times there are one or more 501c3 corporations that are designed to support a specific school. However, legally the school and the 501c3 are different entities, meaning they while they work together, at the end of the day they are separate. An analogy - you and I can support and help each promoting a common goal, but each of us is responsible for ourselves legally and financially.

All this is sounding like gobbly-de-gook but it is important to understand this gobbly-de-gook.

[Micah Chetrit]

Originally Posted by Daniel_LaFleur

While it does make it easier to gain corporate sponsorships, it also can cause a rift between the team and the school as the school cannot be a 501(c)3 ... but a booster club can be.

So what does this mean for the team? can they no longer work under the school's roof? WE have a robotics class , will that not be able to happen? They didn't give us much money, only paid for the bus once. What will we be loosing from the school?

[JohnBoucher]

It all depends on your relationship with the school. Our 501(c)(3) raises funds and pays for all expenses. The school provides space and insurance coverage. There is also money available ONLY for 501(c)(3)'s.

[JesseK]

For now, our 501c3 uses SunTrust. However, many banks are changing their terms right now in order to realign their business models. "Free" checking isn't so free since, for a while, it was being subsidized within the banks by excessive (according to some) fees. So I would wait, or find a bank that has already readjusted their policies/business models for the new regulations.

For example, my personal bank (PNC) will shift their policies on September 12th. Free checking accounts are still 'free' for the most part, yet have fewer perks.

[GaryVoshol]

Micah, you have to check if your school allows groups to do their own fundraising, and more importantly, solicitation. Some schools feel that an FRC team asking for donations would detract from fundraising that the school may be doing. Other schools will allow booster groups to solicit for funds on behalf of sports, music and other areas.

[ebarker]

Okay let's try this. I'll explain some finance by analogy.

Our team has THREE conduits of money flow, a conduit being exactly that. The pathway that the money moves through from the donor to our benefit.

1) Some sponsors will only give money for FRC programs to a 501c3 non-profit corporation called the "United States Foundation for the Inspiration and Recognition of Science and Technology", aka USFIRST, aka FIRST. Funding that they receive on behalf of your team is applied to program registration fees, etc. If there is any balance remaining (money left over after paying your bills to FIRST) then your organization can request the balance be sent directly to your team school or equivalent account.

2) Some people contribute directly to your team by writing a check to the school and have it designated for your team. Some districts call this "designated local school funds".

3) Some teams have access to a local 501c3 non-profit corporation that exists to support the local school. If you do not have access to one then you may have to create your own. Before creating your own 501c3 you need to do a careful analysis to determine if there is advantage in doing so. It will take some time and money to setup the foundation.

Summarizing:
1) USFIRST - for certain donors and expenses
2) local school accounts - typically local sponsors write a check for the team
3) a local 501c3 - existing or newly created, to handle other donors or to disconnect team accounts from the school.

There is a lot of advantage and convenience to having access to or your own 501c3. There is much more flexibility in how you can spend funds and how it gets accessed. It also opens you up to a lot more potential donors if you want to apply for grants and do things beyond FIRST.

.

[Joe Ross]

Wells Fargo waives the fee if you transfer $100 a month to a savings account held with them. I do that on my personal checking account I have with them. They don't care if you transfer that money back later.

I find it hard to believe that a non-profit that has less then 5k needs a national bank, however. I agree with Cynette's suggestion to look for a local bank or credit union.

[RoboMom]

You need to shop around a bit.
In our area, both Wachovia and PNC offer pretty good deals on free business checking for non profits, with no minimum balance.

RE: 501(c)3
2 papers/presentations linked on: http://www.firstnemo.org/resources.htm
created by longtime FIRSTers.

[Al Skierkiewicz]

JP Morgan/Chase is running a lot of commercials in Chicago relating how they support non-profits and not-for-profits and are good for education.