Your recent article on the problems that charities experience with banking is timely (Charities and churches left in financial disarray after Barclays shuts accounts, 4 December). These issues are now so acute that the chief executive of the Charity Commission has found it necessary to write to all the main banks seeking solutions, and we welcome its support on the issue.
While your article focused on one bank, the difficulties that charities, especially smaller community organisations, face go far beyond this. Some banks are withdrawing from this segment of the market. Their back-office infrastructure and their ability to operate charity accounts online have not kept pace with branch closures. The loss of branches has removed a key way that banking staff learn about the often unique requirements of small local charities.
The requirements for updating the business bank profile are causing charities to be “red-flagged” because banks’ systems do not understand charity governance. Organisations’ finances can be left at risk when banks take months or years to remove previous trustees and add new ones.
Charities also experience major problems over anti-fraud and money-laundering requirements. These are designed for businesses, and do not meet the needs of charities. Organisations serving Muslim communities, including those that solely operate in the UK, are experiencing serious challenges over the operation of their accounts as a result of international conflict.
It is essential that the government, banks, the Charity Commission and the voluntary sector work together to find solutions. We must ensure that no charity is prevented from effectively managing its funds. Banking services must be accessible and suited to charities, and at a cost that is not disproportionate to an organisation’s income.
Sarah Vibert Chief executive, National Council for Voluntary Organisations, Ruth Marks Chief executive, Wales Council for Voluntary Action, Richard Quallington Executive director, Action with Communities in Rural England