Managing Finances For A Church-Associated Social Group

Keith Asked:

A friend of mine has been put in charge of the finances of a social group (affiliated with a church, but not technically part of it … so no 501(c)(3) status). He’s wondering what would be the best way to handle the money coming in and out. The group doesn’t have any sort of formal organizational status. And the dollar amount won’t be huge (probably $5-10K total from all members per year).

I’ve seen club bank accounts and I don’t know much about club bank accounts, other than that they exist.

Two questions:

1) Any suggestions on the way to go?

2) Does anyone know much about club bank accounts? How do they work in terms of organization, tax status, control, etc.? I couldn't find much with Google searches.

Club bank accounts are a marketing device used mostly by credit unions and some smaller banks. When I was a VP at a credit union near a University, we would market them for the university clubs. From a tax standpoint there is no difference than any other bank account, and there has to be an actual individual or entity tied to the account.

Probably the best way to deal with this would be to see if the social group has a religious purpose or in some other way falls under the church’s charitable purpose. If so, the church can establish a new bank account in their name for the social club and make your friend an authorized user. This would solve any problems related to taxes and could also make the donations to the group tax deductible.

Before establishing the account, make sure the church talks with their own tax adviser about whether or not the social club would be considered unrelated business income. You don’t want your friend’s CPA to make this determination because then it’s possible the church would hold them responsible for the taxes associated with the unrelated business income.


Joshua Escalante Troesh is a tenured professor of Business at El Camino College and the founder of Purposeful Finance. He is also the owner of Purposeful Strategic Partners, a fiduciary and fee-only financial planning firm and a Registered Investment Advisor. He can be reached for comment at