What happens when a bank shuts down your account?
We started getting requests from our bank to double-check all our details. We are based in countries where infrastructure is poor, and we are running a charity by boot-strapping. Any extra administration becomes a crises. We have to report to our seven different donors, whilst trying to deal with military security changing and access to some of the refugee populations suddenly denied, and a staff member has been detained at the border. Again.
So, a request to obtain hand-signed documentation from every board member is a crises. (No, an e-signature will not do).
Our board members are based across four different countries and travel frequently. The logistics of getting signatures is a grand exercise. I remember when I was finally able to send those signatures off – just as our accounts were shut down. We had not been able to make it in the time period given, even though we had informed our bank and been told in return that the deadline had been extended.
So began the next grand exercise. Explanations to all staff about payment delays. And for staff who were living on their salaries month by month a delay meaning: they would not meet their rent obligations; pay their mobile phone bill; afford the fare to get to work and that was only the start of it. The emotional stress in the workplace was exacerbated by the stress of living in an area where tensions were high, there was, after all, a war on the border.
Death and pain all around us and our much needed bubble popped(!) by an admin issue.
Radio 4 ran this programme about why HSBC had started shutting down charitable accounts that were sending money abroad. The nature of a lot of development and chartable work is that money is sent to areas where governance is poor, where infrastructure is lacking, where it really really hard to get the right paperwork in. Doable, but takes time. The stories on the show reminded me of our own situation last year.
We resolved everything. We managed to get the account up and running. The stress involved was a high cost to pay.
To manage the risk of suddenly not having access to our account we’ve set up another payment method and hold a minimum of funds there. For a small charity its not ideal. But it does mean we can meet our obligations.