Opening a bank account for your new nonprofit organization's is an exciting milestone—it’s the moment when your nonprofit starts feeling like a real, operating entity. However, setting up a nonprofit bank account involves more than just walking into a bank; there are specific steps and documents you need to have in place before you can deposit that first donation.
When Are You Ready to Open a Nonprofit Bank Account?
To legally open a bank account for your nonprofit, you must have completed the following steps:
File your Articles of Incorporation as a nonprofit corporation in your state.
Obtain an EIN (Employer Identification Number), also known as a Tax ID number, from the IRS.
Appoint an individual (either within or outside your organization) to be responsible for the day-to-day management of the account.
Instant Nonprofit can handle these steps for you through our Nonprofit 501(c)(3) formation plans, ensuring that you are ready to open your bank account as soon as your nonprofit is officially incorporated.
Key Tip: Your 501(c)(3) Status is Not Required to Open a Bank Account
Some people believe that you need IRS approval for 501(c)(3) tax-exempt status before opening a bank account. This is a myth. You only need to be incorporated as a nonprofit and have your EIN.
Choosing the Right Bank
We recommend selecting a national bank that offers robust online banking and mobile app functionality. These features will make it easier to manage your finances on the go, deposit checks remotely, and monitor account activity. Always call the bank ahead of time to confirm their specific requirements for opening a nonprofit account.
What You Need to Bring to the Bank
Once you’re ready to open your account, you’ll need to make a single (well-prepared!) trip to the bank. Bring the following four essential documents:
Articles of Incorporation – This proves your organization’s legal existence.
EIN Letter from the IRS – This is your organization’s Tax ID number.
Banking Resolution – This document authorizes someone (likely yourself or a designated officer) to open and manage the bank account on behalf of the nonprofit.
Bylaws – While not always required, some banks may ask for a copy of your nonprofit’s bylaws to understand how your organization is structured.
Potential Bank Challenges
Be aware: nonprofit accounts are not as common as personal or business accounts, so the bank staff may be unfamiliar with the specific requirements. Post-9/11 regulations have increased scrutiny on opening bank accounts, leading to confusion among bankers. It’s common for them to ask you to classify your nonprofit as a “C Corporation” or “S Corporation,” which is incorrect. If this happens, ask to speak to a manager, as your organization is a Nonprofit Corporation (or “Non-Stock Corporation” in some states).
Many nonprofit founders have had to make multiple trips to the bank due to misinformed staff—so don’t hesitate to stand firm and politely educate the bank on your nonprofit’s status. It’s their job to find the correct designation for your account, not yours!
What the Bank Doesn’t Need
Here are documents the banker may ask for that are not necessary to open your account:
IRS Form 1023 application
IRS Determination Letter (this is optional but can be helpful)
Statement from the Incorporator (if our company served as the incorporator, this is not needed as we don’t hold a decision-making role after your organization is established)
If the bank requests any of these unnecessary items, ask to speak with the manager. Feel free to reference the definition of an incorporator from USLegal.com:
"An incorporator is a person who is in charge of setting up a corporation... Once the corporation is registered with the state, the incorporator has no further formal duties."
Final Step: Be Prepared
Download our Board Resolution Template (in your Customer Drive!) and bring it with you to the bank to make sure everything goes smoothly. Being prepared with the right documents and knowledge will help you avoid unnecessary delays and ensure that you can start managing your nonprofit’s funds with ease.
Setting up your nonprofit’s bank account is one of the first steps toward building financial security for your mission. With these tips, you'll be ready to take that step confidently!