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Lack of suitable banking services leaves charities struggling to manage finances


Charities are finding it increasingly difficult to manage their finances appropriately due to a lack of banking services that meet their needs, a survey commissioned by The Civil Society Group has found.

The survey, carried out between March and May 2022, found that increasingly unavailable services mean charities are growing ever more frustrated by the difficulty of performing what should be easy and straightforward tasks.

The Civil Society Group is a collaboration of organisations representing members and groups from across the charity sector and wider civil society that launched in November 2021. It warns that failure to tackle these challenges collectively will put the delivery of charity services at risk and have a disproportionately negative impact on smaller organisations and the communities they work with.

The Group is calling on banks to work with charities to solve the issues in their experience of banking services and to better understand the support that charities need to do their work. It also plans to form a working group with UK Finance on the issue.

Clare Mills, Director of Policy and Communications at CFG (Charity Finance Group), commented:

“Our survey respondents told us, loud and clear, that changes to charity bank accounts and services have increased the challenges being faced when they are trying to look after their charity’s cash. We’d all heard the anecdotes or read the stories about charities facing issues with banking services, but this survey provides the data needed to take the issues to the banking sector.”

Smaller & volunteer-led charities disproportionately impacted

With bank branches reducing, respondents stated that getting to one can mean incurring parking and congestion zone charges, limited parking, or lack of suitable public transport options.

This disproportionately impacts smaller and volunteer-led charities, with 85% of the organisations surveyed having income of less than £100,000 per year. Of these smaller organisations, 44% are based in rural and small-town settings where accessing banking services can be even more difficult.

With 81% of respondents working in a voluntary capacity at their charity, either as trustees or volunteers, many described having to take time out from their paid employment, or using their lunch break, to visit the bank during its operating hours.

Forced to find workarounds

Increasingly unavailable and inaccessible services have forced some charities to engage in poor financial practice.

Charities reported more limited services due to reduced operating hours, staff capacity and types of services and transactions allowed. This includes business desks that may be closed or have long queues, reduced numbers of branch staff (adding to longer waiting times), limited facilities to pay cash, coins and cheques into accounts, and difficulty obtaining new chequebooks.

Some respondents also reported feeling forced to find workarounds that they recognised as poor practice, such as keeping cash at home until enough for the bank to accept a deposit, removing dual authorisation in order to gain access to online banking, and paying cash into their personal accounts before writing a cheque to the charity’s account.

Charities underserved by banks

Charity accounts are typically treated as business accounts, and respondents stated a lack of flexibility within the rules to take into account the difference between the needs of businesses and charities. 67% of all respondents reported problems with changing signatories in the last 18 months.

For most charities, their finances are often managed by volunteers without accounting experience. Charities reported that challenges that arise when confronted by systems designed around businesses, rather than a full consideration of how charities operate and what they need from their bank.

While most charities (64%) prefer online banking, over half don’t currently bank online due to a lack of accessibility. Reasons given for this include the inability to have dual signatories for online business accounts, lack of support from the bank, and no provision for online banking for certain types of account.

Sam Mercadante, Policy & Insight Manager at NCVO, commented:

“This survey has driven home the enormity of the banking challenges that charities face. We heard over 1,200 stories, behind each of which is a person or group of people who are trying to do the best for their community but are finding their every path blocked. One person told us, “I just find it all very confusing and emotional,” and that has really stuck with me. The Civil Society Group commissioned this survey to help all of us better understand the enormity of these challenges, and we will now seek to work together with the Charity Commission, HM Treasury, and UK Finance to find a way forward that both works for the banks and enables charities to get on with the business of supporting their communities.”

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