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Nonprofit Law/Separate checking account for 501c3


I am involved within a chapter level of an organization which has a 501c3 account which derives most of its funding from an annual fund raising event.  Both our income from the fundraiser, and the related expenditures are modest.  When I previously served as treasurer of the chapter, I thought it was "best practice" to establish a separate checking account for ONLY 501c3 transactions, rather than to 'comingle' our "operational funds" which were obtained from dues, and used for member benefits in activities, such as outings and picnics, etc.

As treasurer, I simply viewed having two completely separate accounts as the "best practice" for assuring the two types of monies could not possibly be confused and the procedures for use of the 501c3 monies would be more easily understood by the Chapter's officers.  I was recently asked why we have a checking account specifically for 501c3 monies.  I was informed that many other organizations 'comingle' operational and 501c3 funds.  My response was simply that I viewed it as a "best practice" way of validating all income and expenditures.

From your perspective is it best to have a separate 501c3 account, or is it better to have a single checking account for both 'operational funds' and the 5013c accounts comingled?

I do not think it is an issue as to best practice because there is no substantial difference as to the legal effect or the ease of handling.  I would, though, think it is superfluous to have separate accounts.  I would recommend separate accounts for 501(c)(3) organizations when some funds are held for long-term use, such as an endowment, though.

Harvey Mechanic
Attorney at Law

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.

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Harvey Mechanic


I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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