The charity sector plays a critical role in tackling some of the most important issues in society – from health, wellbeing and education to international conflict and poverty. Today, according to the Charity Commission more than 170,000 registered charities in the UK manage over £102bn in annual income, delivering much-needed support both domestically and overseas.
Yet, to deliver maximum impact, charities require banking solutions that respond to their unique challenges. We believe that finance should be used as an enabler of social good, which is why we’re committed to supporting our thousands of charity customers through specialist, relationship-led banking.
Every charity should be empowered to access, and benefit from, the right financial support, to enable them to deliver their mission. But with unique regulatory and organisational frameworks, getting the right banking support can sometimes feel like a hurdle.
The complexities of charity banking
Historically, charities have not been well served by the banking sector. Banks can often take a one-size-fits-all approach that does not account for the specific frameworks that charities operate within. Despite sector-wide efforts to improve banking services, including new government-led guidance for charities, it’s evident that significant challenges remain.
In Charity Finance’s 2025 Charity Banking Survey, nearly all respondents (92%) had experienced at least one difficulty related to banking in the past two years.
According to the report, over three-quarters of respondents (77%) found changing signatories on bank account mandates difficult, and 40% had been asked to complete checks that were not designed for charities or voluntary organisations. Many cited the banking sector’s lack of knowledge and communication as key obstacles, resulting in widespread frustration.
However, all banking providers must adhere to the same financial regulations – and this often means additional checks for charities, due to the complex nature of their operations.
When charitable aid and service is required overseas – often in unstable territories or war zones – many organisations are working across borders, countries and continents to support those most in need. This international exposure, and the volatile environments in which some charities operate, results in a greater regulatory perception of risk. Even for the most well-intentioned organisations, there is an increased vulnerability to financial crime, money laundering and terrorist financing.
While the charitable mission is vital, banks have a regulatory responsibility to ensure payments are not diverted into the wrong hands. This necessitates extensive regulatory reviews from banks to ensure risk is monitored and managed carefully – to protect both the charity and the financial system.
Increased challenges exist for unregistered charities. With limited publicly available information or reporting, this lack of transparency means it is very difficult for banks to verify an organisation and could lead to significant reputational and operational risk.
In practice, this can result in charities experiencing significant delays, additional checks or account rejections when applying for banking products and services.
The best banking relationships are built on partnerships. When charities understand what triggers extra scrutiny, and banks fully understand the realities of the organisation’s work, we can navigate challenges together. Unfortunately, many mainstream banks have limited knowledge about the sector’s specific banking requirements, which can make the process even more difficult.
We know the system is not without fault, but by having a deeper understanding of the charity sector’s financial needs and operations, banks like Unity can help to build bridges – providing better finance options while managing risk responsibly.
Supporting the sector
Working at the frontline for some of the most vulnerable individuals and communities, charities play a vital role in enabling positive societal change, which Unity is proud to support.
Unlike many mainstream banks, our knowledge within the sector has been built over 40 years, through strong links with charity bodies and a growing customer base. This has given us a deep understanding on how charity structures and governance work: we know the difference between a CIC and a CIO, we appreciate that trustees are volunteers who are often giving up their spare time, and we keep this in mind when developing new products and services.
Tools and tips for better banking
So that charities can fully benefit from banking providers that understand their requirements and anticipate their challenges, it’s vital that the finance sector as a whole develops the specialist knowledge and expertise in place to best deliver for customers.
It’s also important that charities have an open and transparent dialogue with their banking partners. By encouraging a greater level of understanding and collaboration between the two sectors, we can make real strides forward in service and support.
To help charitable organisations navigate their banking more smoothly, here are some practical tools and tips to keep in mind:
- Give advance notice of any unusual transactions. If your charity is about to send emergency aid to a conflict zone, or receive a significant legacy donation, a quick call to alert your bank can prevent any delays or frozen transactions while dedicated fraud systems investigate.
- Be open and transparent with your bank. Share details around any major changes to any key donors, beneficiaries and trustees, particularly those who might operate in high-risk territories.
- Share your account admin. Make sure you have enough signatories on your account and, where possible, avoid too much burden on volunteers who may not always be available to make urgent payments. Try to avoid having trustees as the only point of contact.
- Prioritise security. Ensure you have dual signatory authorisation – this helps to protect the charity from fraud and protects the individuals making the payments.
- Speak out. If the service you’re receiving from your banking provider feels unfair or poor, then don’t hesitate to complain – you shouldn’t suffer in silence.
- Get engaged. Work with relevant industry bodies so concerns are heard collectively.
- Professional support. Take advice from accountants or auditors where needed and consider payment specialists for complex international transfers.
On top of these handy tips, there is lots of useful information and support available via UK Finance’s Voluntary Organisation Banking Guide – a useful resource for charities of all shapes and sizes.
How your banking provider can support your mission
While regulation and risk management can create frustrations for charities, we believe the right banking partner can help to make these challenges easier to navigate.
We know that every organisation is different, with unique needs, structures and missions, which is why our approach is built on genuine conversation and partnership – not a one-size-fits-all process.
While we won’t always have the answers, a committed charity sector bank will help organisations that are making a positive difference to navigate their banking challenges and find an appropriate solution.
What is ethical finance?
Ethical finance refers to investors or lenders that aim to generate positive impact alongside their financial returns.
Today, there are a growing number of ethical finance providers. At Unity, we work towards a double bottom line strategy, which means that profits go hand in hand with purpose, measuring positive social, environmental and community benefits alongside sustainable commercial returns.
In other words, when you bank with Unity, you’re also helping to support other organisations that are creating a positive impact in their communities.
We never fund projects that have a negative impact on people or planet, and every lending decision is assessed against the UN Sustainable Development Goals to ensure it is creating a tangible impact.
We all have the power to improve the world we live in. By choosing where to put our money, we can encourage positive change.
Leanna McEwan is director for the public & third sector team at Unity Trust Bank
Charity Finance wishes to thank Unity Trust Bank for its support with this article
