V .
NEIGHBORHOOD ORGANIZATION FINANCES
MONETARY ASSETS MANAGEMENT
Every neighborhood association accumulates money for one reason or another over time . The association needs a management system in place for dealing with these funds .
What kind of bank account should be opened and how do you go about opening an account for your organization ? These are questions that should be made by the board of directors on behalf of the entire membership .
Whether your association chooses to become a corporation or if you decide to designate a person , either can open a bank account for the group . If you are a corporation and you also have nonprofit status , you may be eligible to receive free or reduced fee banking privileges at some banks . Check with several banks to get the best option for the group . If there is a bank in or near your neighborhood approach them about becoming a member of your association .
TYPES OF BANK ACCOUNTS
� Checking . Any accounts open to potential individual customers are open to neighborhood associations . The least expensive usually have minimum deposit requirements . Your association should obtain pre-numbered checks .
� Savings . If your group will be making a limited number of withdrawals , you might be better off with a savings account rather than a checking account . The best arrangement is often a savings account with checking privileges . These usually require a minimum account balance .
There are two things to consider when determining the type of bank account for your neighborhood association : � The frequency of withdrawing funds . � The amount of money your association is able to deposit . Do you have enough to keep a minimum balance in your account or pay services fees , if any ?
OPENING A BANK ACCOUNT There are certain procedures you should keep in mind when opening a bank account for your neighborhood association . The procedures are as follows :
1 . Obtain a Tax Identification Number . A tax identification number is a federal number that is filed with the Internal Revenue Service ( IRS ). You must have this number to open an account with any bank . This enables the bank to report the earnings of your account to the IRS . If you do not have a number , get one from the IRS using the steps on page 11 .
2 . If the organization does not have a tax ID number yet , you could open an account temporarily with a member ’ s personal Social Security Number . On many occasions the group ’ s Treasurer or Secretary will use his / her Social Security Number to open an
Neighborhood Organizational Handbook – Arlington , Texas 14