Nine in ten charities have experienced one or more challenge related to their banking over the two years, a report has found.

Three in four found changing signatories on bank accounts difficult and two in five face checks that are not designed for the voluntary sector.

Just under a third are struggles to open accounts with a new back and almost three in ten encountered “problematic” red tape which required providing information about all their trustees, not just signatories.

The findings have emerged the Charity Banking Challenges 2024 report published by sector coalition the Civil Society Group.

This involved the views of 1,899 charity representatives, mainly trustees and volunteers from small to medium sized charities.

Communication barriers are also problematic, especially given the high number of branch closures among High Street banks.

One in three charity representatives must travel at least 30 minutes to their nearest branch.

A quarter say they struggle to “get clear explanations from their banks” and one in five say communications they receive from their bank leaves them “worried or feeling threatened”.

“All too often, banks do not understand the governance structure of charities and therefore, don’t ask the right questions,” said report co-author Clare Mills, who is also deputy chief executive of Charity Finance Group.

“At times, they do not explain clearly enough what is required and why. There is a clear disconnect between the service that retail banks think they provide to their charity account holders, and the level of service they receive.

She added: “The majority of those managing banking for charitable organisations are giving their time, skills and energy for free.

“Unfortunately, too many are wasting time and resources trying to resolve common banking issues. This means that the charity’s beneficiaries – the people and communities they serve – miss out.

“Banking challenges not only drain precious resources from charities, but can expose them to risks, such as fraud or having an account closed without warning or explanation.”

NCVO executive director Saskia Konyenburg said that the report’s findings “demonstrate that the banking sector still isn’t meeting the essential needs of charities and voluntary organisations”.

“The sheer level of charity staff and volunteers experiencing significant banking challenges, shows these issues are systemic and require immediate action,” she said.

“Banking is a key need for charities, but retail banking services are not set up with charities in mind.

“Therefore, things that should be simple like changing a signatory become onerous tasks, draining time and finite resources at best, and at worst leaving them with closed accounts and no access to funds.

“We urge banks to expedite this work to implement meaningful changes that will ensure charities can manage their finances effectively and focus on supporting the communities they’re set up to help.”

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