Our club meets informally one night a week at a local fast food restaurant in California. We do not have club dues. We do have 3 club officers. We hold several Open tournaments per year; plus several scholastic tournaments.
My question relates to what small clubs do as far as having a free checking account at a bank. The scholastic group receives some donations towards their tournaments. Our bank account will likely never exceed $2,500.
We currently have free checking at a bank where one of our members has a checking account and he is a signatory on the club account. I assume the bank may be using his social security number as an EIN #. But we would like to add the president of the club as a signer on the account. And the bank says we need to have Bylaws, minutes of meetings, EIN# etc. to add someone. Or if we go to a new bank, they also ask for these things.
So any small clubs out there that have gone through this process? Or have an easier suggestion?
We filed for an EIN from the IRS. It wasn’t a difficult process. The club’s cash flow is so low, I doubt it will ever need to file a return. We didn’t even bother to file for nonprofit status to avoid having to pay sales tax – that’s a $300 up-front outlay, and the sales taxes we had to pay didn’t even come close to that.
I’m the treasurer of the Hackettstown CC, a small but active affiliate in western NJ.
When my bank informed me that I needed a special IRS number and some other nonsense for a club account I simply opened a new personal checking account. My wife, another member who lives in Pennsylvania, and I have check-writing privileges. The name on the account, however, is “Hackettstown Chess Club.” Don’t ask me why the bank permitted this obvious work-around.
No muss, no fuss.
A monthly statement addressed to me, my wife, and the other member is mailed to my home every month. I immediately toss it into the garbage without opening it. I don’t recall ever properly balancing a check book, and I am not about to begin.
We conduct 95% of club financial transactions through cash and online banking. When I collect entries I keep the cash in my wallet. When the monthly or one-day tournament ends I pay prizes on the spot in cash, and transfer the excess (the “profit”) to the club account from my savings account.
I similarly transfer money from the club account to my personal account when I purchase supplies or pay to rate games, for affiliate fees, etc. I do this as close to ASAP as I can, before I forget what’s going on.
This system will work for any club provided the individuals involved are honest, can perform simple arithmetic, and the bursar remembers to retain a supply of $1 bills on his or her person (for split prizes). We currently have about $450 in the bank. However, clubs that run very large tournaments, collect membership dues, or are otherwise involved in high(er) finance might wish to do things more formally.