Opening a Donation Account

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Question:

We need to open up a donation account for a young boy who has cancer. Would the best way to do that be to put the boy on as primary owner with his social security number and add whomever they want to act as the person handling the account as joint or would they just be authorized signers? I am assuming that most of the checks would be made out to the "boys name cancer fund" OR would this type of account need it's own EIN #?

Answer:

This BOL Article is the single best resource available on the subject. It has been updated to reflect current IRS philosophies in connection with their willingness to issue EINs for these types of accounts. Do not tell people the contributions are tax deductible because they are not. Consider your organization's reputation risk in opening these accounts and the implication to the public that your bank is in some way assuring that the funds are used for the purpose intended.

First published on BankersOnline.com 9/11/06