Rule number one: KISS - Keep It Simple Stupid!
Do we really need a bank account?
How many times has money from other volunteers needed to pass through your personal bank account? If it isn't a major inconvenience to you at this point in time then it's not a problem. If you are starting to feel that you need a better money management strategy, please continue reading.
If you really need a bank account
Minimalist structures often suffice. In Belgium and many other non-US countries, it is possible to open a bank account for an informal organisation without too much of a formal structure in place. You just need to clearly convince the bank of a few things with a small written statement:
- this is a non-profit, not a money laundery
- there is at least some process in place to decide who gets to be in charge of the money
- the people with access to the bank account are not likely to change a lot
In the US you will often need to incorporate with your local state government. In this case we recommend that you complete a registration for a "not for profit" corporation. The costs and currency requirements are often lower. It also sets you up for the infamous IRS 501c3 exemption should you desire.
Transparency earns you trust
You need trust from donors and volunteers, so publish _all_ your monetary transactions to the web:
- anonymise this information only where needed
both cash & bank, incoming & outgoing transactions
- should you need to keep this private, post information on how interested parties can request/review your documentation
If you plan on using a website for transactions, consider working with your Better Business Bureau or equivalent organization.
For some donors, it may be fiscally interesting to directly pay a bill for your LoCoTeam. This has the additional advantage of being easier for you to administer.
- If someone wants to make a really big donation:
- Always try to make a verifiable trail. Anything is better than cash.
- Thank them: in person, on your blog, on the team list.
- Draw a very clear line where you want to spend money in the near future.
- Have a prioritised wishlist of things that would require funding to happen.