{"id":51446,"date":"2025-11-02T03:41:26","date_gmt":"2025-11-02T11:41:26","guid":{"rendered":"https:\/\/www.sofi.com\/learn\/?p=51446"},"modified":"2025-11-10T13:12:25","modified_gmt":"2025-11-10T21:12:25","slug":"how-to-set-up-a-fundraising-bank-account","status":"publish","type":"post","link":"https:\/\/www.sofi.com\/learn\/content\/how-to-set-up-a-fundraising-bank-account\/","title":{"rendered":"How to Set Up a Fundraising Bank Account"},"content":{"rendered":"<div id=\"toc_container\"><p class=\"toc_title\">Table of Contents<\/p><ul class=\"toc_list\"><li class=\"toc_li\"> <a href=\"#what-is-fundraising-bank-account\">What Is a Fundraising Bank Account?<\/a><li class=\"toc_li\"> <a href=\"#what-needed-setup-fundraising-account\">What Is Needed to Set Up a Fundraising Account?<\/a><li class=\"toc_li\"> <a href=\"#what-to-do-money-while-raised\">What to Do With the Money While It Is Being Raised<\/a><li class=\"toc_li\"> <a href=\"#things-consider-fundraising-bank-account\">Things to Consider With a Fundraising Bank Account<\/a><li class=\"toc_li\"> <a href=\"#tax-consequences\">Tax Consequences<\/a><li class=\"toc_li\"> <a href=\"#can-bank-held-liable\">Can the Bank Be Held Liable If Funds Are Misused?<\/a><li class=\"toc_li\"> <a href=\"#are-there-safeguards-in-case-of-fraud\">Are There Safeguards in Case of Fraud?<\/a><li class=\"toc_li\"> <a href=\"#the-takeaway\">The Takeaway<\/a><\/ul><\/div><p>Fundraiser bank accounts offer a way to hold funds that will be used for those in need. They can keep funds safe until they are transferred to, say, a neighbor rebuilding a flooded house or paying medical bills when facing a tough diagnosis.<\/p><p>If you are planning to raise money on someone else&#8217;s (or a cause&#8217;s) behalf, opening a fundraising bank account could be a good option. But how you do so will depend on what the account is for. Here&#8217;s a closer look at what a fundraising bank account is and how it operates.<\/p><div id=\"key-points\" style=\"margin-top: 32px;border-left-style: solid;border-color: #00a2c7;padding-left: 18px;\"><p style=\"font-size: 18px;font-weight: bold;padding-left: 18px;\">Key Points<\/p><p style=\"padding-left: 18px;\">\u2022&nbsp;&nbsp; Identifying information like Social Security number, name, and address is required to set up a fundraising bank account.<\/p><p style=\"padding-left: 18px;\">\u2022&nbsp;&nbsp; Donations are generally not taxable for the beneficiary, but interest earned may be.<\/p><p style=\"padding-left: 18px;\">\u2022&nbsp;&nbsp; For minors, accounts should be established by legal guardians or through a trust fund.<\/p><p style=\"padding-left: 18px;\">\u2022&nbsp;&nbsp; For deceased beneficiaries, an EIN is needed, and the account must be set up for specific purposes.<\/p><p style=\"padding-left: 18px;\">\u2022&nbsp;&nbsp; Setting up a trust can provide added security and ensure funds are used for intended purposes.<\/p><\/div><h2 id=\"what-is-fundraising-bank-account\">What Is a Fundraising Bank Account?<\/h2><p>A fundraiser <a href=\"https:\/\/www.sofi.com\/banking\/\" target=\"_self\">bank account<\/a> is one set up specifically to hold donations. For most of us, that means donations to a small cause, be it ourselves, another individual, or a small group of people. A fundraising bank account sets aside the money specifically for the beneficiary (or beneficiaries), though it may not be opened by the individual who will benefit. Some points to consider:<\/p><p class=\"margin-left\">&#8226;&nbsp;&nbsp;Keep in mind that opening a bank account for fundraising is different from donating to a charity. These are bank accounts people set up to hold donations to an individual or family as opposed to starting a full-on charity of their own.<\/p><p class=\"margin-left\">&#8226;&nbsp;&nbsp;A fundraising bank account is not the only way to capture donations. Most major <a href=\"https:\/\/www.sofi.com\/learn\/content\/crowdfunding\/\" target=\"_self\">crowdfunding platforms<\/a> make it easy to accept donations through the platform itself, or you may also be able to take donations via peer-to-peer transfer services. The money could then be transferred directly to an individual&#8217;s personal checking or savings account.<\/p><p class=\"margin-left\">&#8226;&nbsp;&nbsp;Unless you&#8217;re offering something in return for the money or the total donations, it&#8217;s not considered taxable income, though the crowdfunding platform may report the transactions to the IRS, or Internal Revenue Service. The <a href=\"https:\/\/www.irs.gov\/newsroom\/money-received-through-crowdfunding-may-be-taxable-taxpayers-should-understand-their-obligations-and-the-benefits-of-good-recordkeeping\" target=\"_blank\">IRS website<span class=\"site-exit-icon\"><\/span><\/a> provides guidance on how to handle money raised as part of crowdfunding and possible tax implications.<\/p><p>Opening a fundraising bank account can still be the best option for some situations. It can provide more formal protections for beneficiaries and assure the donated monies are separate from other funds.<\/p><p><\/br><\/p><div><style>\n.cta-headline h3 {\n  font-size:36px;\n  width:65%;\n  background-color: transparent !important;\n}\n\n.cta-headline h4 {\n  font-weight:500;\n  padding-top:12px;\n  padding-bottom:16px;\n  width:63%;\n}\n\n@media (max-width: 767px) {\n.cta-headline {\n  padding-top: 12px;\n  margin-top: -10px;\n  margin-left: -20px;\n  padding-left: 20px;\n}\n.cta-bottom {\n  margin-left: -20px;\n  padding-left: 20px;\n  margin-bottom: -30px;\n  padding-bottom: 12px;\n  padding-top: 16px;\n}\n.cta-headline h3 {\n  font-size: 23px !important;\n  width: 70% !important;\n  background-color: transparent !important;\n}\n.cta-headline h4 {\n  font-size: 16px;\n  width: 100% !important;\n  padding-bottom: 42px !important;\n}\n}\n<\/style>\n\n<div>\n <sp-rc-box id=\"learn-banner\" class-names=\"box--background-image u-margin-top u-margin-bottom u-bg-sofi-blue l-justified-block-vertical u-padding-bottom-xs u-padding-top-sm\"\n background-image-styles='{\n \"size\": \"cover\",\n \"positionMobile\": \"bottom right\",\n \"positionDesktop\": \"center\",\n \"urlMobile\": \"https:\/\/d32ijn7u0aqfv4.cloudfront.net\/wp\/wp-content\/uploads\/raw\/4-APY-Boost-Banner-Mobile-v2.png\",\n \"urlTablet\": \"https:\/\/d32ijn7u0aqfv4.cloudfront.net\/wp\/wp-content\/uploads\/raw\/4-APY-Boost-Banner-Desktop.png\",\n \"heightMobile\": \"150px\",\n \"heightTablet\": \"250px\"\n }'\n >\n <div class=\"cta-headline\">\n  <h3 class=\"u-margin-top-none u-color-ink\"><span class=\"u-color-white\">Increase your savings<\/span><br> with a limited-time APY boost.*<\/p>\n <\/div>\n <div class=\"cta-bottom\">\n <p>\n <sp-rc-cta class-names=\"btn--ink btn--small\" cta-text=\"Learn more\" cta-url=\"https:\/\/www.sofi.com\/banking\/?cta_banner=apy-boost-promo\">\n <\/sp-rc-cta>\n <\/p>\n <\/div><\/br>\n<\/sp-rc-box>\n<\/div>\n <div style=\"background: #dfdeda;margin-top: -40px;\">\n <p id=\"learn-banner-disclosure\" style=\"font-size: 10px;padding-left: 12px;padding-top: 4px;padding-bottom: 4px;margin-bottom:36px;\">*Earn up to 4.00% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.30% APY as of 3\/31\/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12\/31\/26. Rates are variable, subject to change.  Terms apply <a href=\"https:\/\/www.sofi.com\/banking\/#2\">here<\/a>. SoFi Bank, N.A. Member FDIC.<\/p>\n<\/div><\/div><h2 id=\"what-needed-setup-fundraising-account\">What Is Needed to Set Up a Fundraising Account?<\/h2><p>What you need to set up a fundraising bank account will vary depending on the bank you choose and even the local laws in your area. A good first step: Explain the purpose of your account to the bank when you open it. This way, they will have a full picture of what your goal is and be able to guide you.<\/p><h3>Your Identification Information<\/h3><p>Just like when you open a new bank account, you&#8217;ll need identifying information such as a Social Security number, name, and address \u2014 but whose identifying information you need will vary. If the fundraising account is for donations to you as an individual, your own information will be needed.<\/p><h3>The Beneficiaries&#8217; Identification Information<\/h3><p>But if you&#8217;re <a href=\"https:\/\/www.sofi.com\/learn\/content\/can-i-open-a-bank-account-for-someone-else\/\">opening an account for a someone else<\/a> to benefit from, it may make more sense to open the account with their credentials. In fact, if you can, bring them to the bank with you and have them open the account in their own name. A bank may or may not allow you to open an account for another person if they&#8217;re not present or haven&#8217;t provided signed and notarized forms.<\/p><p>If the beneficiary doesn&#8217;t have a Social Security number or you&#8217;re opening the account for multiple beneficiaries, you may need to obtain an Employer Identification Number, or EIN, from the IRS for the account. (This is simply a way for the IRS, or Internal Revenue Service, to keep tabs on the money for tax-reporting purposes \u2014 it doesn&#8217;t, in this case, have anything to do with being someone&#8217;s employer.)<\/p><h2 id=\"what-to-do-money-while-raised\">What to Do With the Money While It Is Being Raised<\/h2><p>When you are gathering funds to <a href=\"https:\/\/www.sofi.com\/learn\/content\/end-of-year-donations\/\">support a charity<\/a> or help a person in need, it&#8217;s vital to keep it safe. A smart way to do that: Make sure that money gets into the bank account ASAP. Depositing it directly will protect it from possible loss. As other deposits come in, the balance will grow until the happy day you are able to distribute it to the individual or charity that will benefit from your kindness.<\/p><p><strong><em>Recommended: <a href=\"https:\/\/www.sofi.com\/learn\/content\/how-to-make-quick-cash\/\">How to Make Money Fast<\/a><\/em><\/strong><\/p><h2 id=\"things-consider-fundraising-bank-account\">Things to Consider With a Fundraising Bank Account<\/h2><p>There are some complications that can arise when opening a bank account for fundraising. Some examples:<\/p><h3>Fundraising Accounts for Deceased Beneficiaries<\/h3><p>In some cases, you may be raising money to pay for a deceased person&#8217;s <a href=\"https:\/\/www.sofi.com\/learn\/content\/life-insurance-death-benefit\/\">funeral costs<\/a> or to provide living expenses for loved ones left behind. Of course, if someone has passed away, you can&#8217;t use their Social Security number to open an account \u2014 so you&#8217;ll need to obtain an EIN, as mentioned above, and again, let the bank know explicitly the purpose of the account.<\/p><h3>Fundraising Accounts for Minor Beneficiaries<\/h3><p>Perhaps you want to help collect money for a child who needs cash for medical or educational expenses. Be forewarned that raising money for minors can come with a variety of complications \u2014 including the problem of ensuring the minor uses the money for what it&#8217;s being set aside for. <\/p><p class=\"tab\">&#8226;&nbsp;&nbsp; Establishing the account by or for the child&#8217;s legal guardian is a good way of safeguarding the funds and making sure they&#8217;re being used for the intended purpose. <\/p><p class=\"tab\">&#8226;&nbsp;&nbsp; If that option is unavailable, you might consider setting up a <a href=\"https:\/\/www.sofi.com\/learn\/content\/what-is-a-trust-fund\/\">trust fund<\/a> \u2014 which involves putting the legal responsibility for the money into a third party&#8217;s hands, with the added option of specifying certain ways the money can be used. An attorney can guide you through the process of setting up a trust.<\/p><h2 id=\"tax-consequences\">Tax Consequences<\/h2><p>As mentioned above, gift funds received in a fundraising bank account may not be taxable as income \u2014 although there are exceptions, and you should always consult a <a href=\"https:\/\/www.sofi.com\/learn\/content\/income-tax-preparer\/\">tax professional<\/a> to be sure you understand the tax liabilities of your planned actions. For example, if the account the donations are being held in earns interest, taxes may be assessed on those earnings.<\/p><p>In addition, keep in mind that these kinds of donations are not considered charitable donations, and so will not be tax deductible for the donor.<\/p><h2 id=\"can-bank-held-liable\">Can the Bank Be Held Liable If Funds Are Misused?<\/h2><p>Unfortunately, scammers do exist \u2014 and it&#8217;s possible that some people who set up fundraising bank accounts may end up using the monies for a purpose other than what was promised to the donors. If you&#8217;re setting up an account in good faith for someone else&#8217;s use, it&#8217;s worth checking with the bank about who&#8217;d be liable if the beneficiary misused the funds. <\/p><p>It&#8217;s not unheard of for banks to request that they be indemnified if this should happen and the money isn&#8217;t used according to the fund&#8217;s original intention.<\/p><p><strong><em>Recommended: <a href=\"https:\/\/www.sofi.com\/banking\/money-management-guide\/\">Ways to Manage Money<\/a><\/em><\/strong><\/p><h2 id=\"are-there-safeguards-in-case-of-fraud\">Are There Safeguards in Case of Fraud?<\/h2><p>It&#8217;s upsetting to think about, but yes, fraud does happen. People have been known to take advantage of the compassion of do-gooders and use the money raised to pay for things other than to fund&#8217;s intention. <\/p><p class=\"tab\">&#8226;&nbsp;&nbsp; Setting up a formal trust is one way to ensure the funds can only be used within the proper parameters. <\/p><p class=\"tab\">&#8226;&nbsp;&nbsp; You can also check with the bank to learn if there are any other safeguards in place in case of <a href=\"https:\/\/www.sofi.com\/learn\/content\/types-of-bank-account-fraud\/\">bank fraud<\/a>.<\/p><h2 id=\"the-takeaway\">The Takeaway<\/h2><p>Opening a fundraising bank account is one way to set aside money being gathered for an individual or small group. The funds will be protected and can accumulate to help the beneficiary. When acting on good intentions, though, it&#8217;s important for the account&#8217;s creator to understand how these accounts function, what&#8217;s required to open one, and that they don&#8217;t afford any tax deductions for donors. With these steps taken, you can be well on your way to helping those in need or a cause that moves you.<\/p><p>On the topic of bank accounts, how are your own accounts doing? <\/p><p><p>Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you\u2019ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.<\/p>\n<br \/><center><i>Better banking is here with SoFi, NerdWallet\u2019s 2024 winner for Best Checking Account Overall.* Enjoy 3.30% APY on SoFi Checking and Savings with eligible direct deposit.\n<\/i><\/center><\/p><p class=\"u-text-align-center\"><sp-rc-cta cta-text=\"Open an account\" cta-url=\"https:\/\/www.sofi.com\/signup\/banking\/v1\"><\/sp-rc-cta><\/p><h2 id=\"\">FAQ<\/h2><h3>How do I set up a charity account?<\/h3><p>To set up a fundraising bank account, you&#8217;ll need to explain to the bank the purpose of your account and ensure you have all the information they need, likely including the beneficiary&#8217;s Social Security number.<\/p><h3>Do I need a tax ID for a fundraiser?<\/h3><p>Depending on the type of account you set up and whether or not the beneficiary&#8217;s Social Security number can be used, you may need to get a tax ID number (such as an Employer Identification Number, or EIN) in order to open the account.<\/p><h3>How do you account for donations?<\/h3><p>All donations should be tracked for tax reporting purposes \u2014 and keeping them in a separate account makes it easy to see which funds are personal and which are gifts.<\/p><hr \/><p><font size=\"2\">SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi\u00ae Bank Debit Mastercard\u00ae is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.\n<\/font>\n<br><br \/><font size=\"2\" id=\"bank-apy\">Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 3\/31\/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at <a href=\"https:\/\/www.sofi.com\/legal\/banking-rate-sheet\" class=\"underline\">https:\/\/www.sofi.com\/legal\/banking-rate-sheet<\/a>\n<br><br>\nEligible Direct Deposit means a recurring deposit of regular income to an account holder\u2019s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder\u2019s employer, payroll or benefits provider or government agency (\u201cEligible Direct Deposit\u201d) via the Automated Clearing House (\u201cACH\u201d) Network every 31 calendar days.\n<br><br>\nAlthough we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them. \n<br><br>\nDeposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.\n<br><br>\nSee additional details at <a href=\"https:\/\/www.sofi.com\/legal\/banking-rate-sheet\" class=\"underline\">https:\/\/www.sofi.com\/legal\/banking-rate-sheet<\/a>.\n<\/font><br \/><font size=\"2\">*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.<\/font>\n<br><br \/><font size=\"2\" id=\"bank-fee\">\nWe do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href=\"sofi.com\/legal\/banking-fees\/\" class=\"underline\">sofi.com\/legal\/banking-fees\/<\/a>.\n<\/font><br \/><font size=\"2\">^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary. <\/font><br><br \/><font size=\"2\"><strong>Financial Tips & Strategies:<\/strong> The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.<\/font>\n<br><br \/><font size=\"2\"><strong>Tax Information:<\/strong> This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and\/or tax advisor if you have a question requiring legal or tax advice.<\/font>\n<br \/><br \/><font size=\"2\"><strong>External Websites:<\/strong> The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.<\/font><\/p><p><font size=\"2\">SOBNK-Q425-019<\/font><\/p>","protected":false},"excerpt":{"rendered":"<p>Table of Contents What Is a Fundraising Bank Account? What Is Needed to Set Up a Fundraising Account? What to Do With the Money While It Is Being Raised Things to Consider With a Fundraising Bank Account Tax Consequences Can the Bank Be Held Liable If Funds Are Misused? Are There Safeguards in Case of [&hellip;]<\/p>\n","protected":false},"author":211,"featured_media":51456,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[58,65,20815],"tags":[20787,20794,20824,20806],"class_list":["post-51446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budgeting","category-financial-independence","category-money","tag-ally","tag-investy","tag-moneygen","tag-moneyll"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.2 (Yoast SEO v26.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Set Up a Fundraising Bank Account | SoFi<\/title>\n<meta name=\"description\" content=\"Fundraising bank accounts can be used to help a person in need or a worthy cause. Learn how to set one up, plus scams to avoid.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sofi.com\/learn\/content\/how-to-set-up-a-fundraising-bank-account\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Set Up a Fundraising Bank Account | SoFi\" \/>\n<meta property=\"og:description\" content=\"Fundraising bank accounts can be used to help a person in need or a worthy cause. 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Learn how to set one up, plus scams to avoid.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.sofi.com\/learn\/content\/how-to-set-up-a-fundraising-bank-account\/","og_locale":"en_US","og_type":"article","og_title":"How to Set Up a Fundraising Bank Account | SoFi","og_description":"Fundraising bank accounts can be used to help a person in need or a worthy cause. 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For most of us, that means donations to a small cause, be it ourselves, another individual, or a small group of people. A fundraising bank account sets aside the money specifically for the beneficiary (or beneficiaries), though it may not be opened by the individual who will benefit. Some points to consider:\"\r\n    }\r\n  },{\r\n    \"@type\": \"Question\",\r\n    \"name\": \"What Is Needed to Set Up a Fundraising Account?\",\r\n    \"acceptedAnswer\": {\r\n      \"@type\": \"Answer\",\r\n      \"text\": \"What you need to set up a fundraising bank account will vary depending on the bank you choose and even the local laws in your area. A good first step: Explain the purpose of your account to the bank when you open it. 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