How fin(tech)-providers impede support to African-led foundations

Or how they could support it instead | Or how to get around it

  • Exploring all the opportunities that are there (a whole lot — we checked around 30 options).
  • Researching their websites for what is possible and what isn’t.
  • And then emailing them or calling them several times a week to check the progress.

The Regulations

Especially since two years, when European financial regulations became far more strict in fighting money laundering and financing terrorism (In Dutch: De Wet ter voorkoming van witwassen en financiering van terrorisme (Wwft). So, when applying for a bank account as a foundation, banks will check each board member’s ‘identity’ and the money flows . A so-called Know-Your-Customer (KYC) check.

The Banks

Several banks offer a commercial account for foundations. The websites advertise with how fast you can have a bank account after registration. So, at first, we were thinking we could choose which one fit best.

The Waiting lists

Because of COVID-19 and many companies starting an online webshop there were extra waiting lists. I was told many times.

  • SNS Bank was very much transparent about their waiting lists to open a bank account as a foundation: 3 months.
  • Triodos told us: “At least 2 months.”
  • Rabobank told us: “You first need to have your private accounts with us.”
  • ASN Bank and online bank N26 don’t provide commercial accounts for foundations.

The Payment Service Providers (PSPs)

We had our bank account. “Now we can almost start!” we must have thought…

The Risk-management

Why we have rejected at the bank at and Mollie? I imagine someone at the onboarding department with a list of all potential financial risks in front of him. That looks like this:

The Non-transparency

It had been so frustrating at times, because all of this is so non-transparent.

The De-risking

At first, I was thinking we did something wrong that we were not welcome or rejected so many times. Asking for help from colleagues made me realise that it is a problem that all foundations transferring money to Africa face, especially the smaller ones.

  • Apply for an ANBI status (for foundations in the Netherlands; which will take a minimum of 8 more weeks at the tax institution (!)).
  • Have at least 3 board members for checks and balances.
  • Ensure transparency of all money flows.
  • Take our partnering NGOs into account! It are all formally registered NGOs in their country and have a bank account at national bank (who also did a KYC-check).
  • Look at our website and you’ll find (financial) transparency. And that’s in the first place, because we want to be transparent to our donors and partnering NGOs. We promised 95% of all donations, so we need to show that we do what we say.
  • Take size into account! It can’t be that we — as a starting initiative — have everything in place just as well-established multimillion-NGOs have. Actually, it was on purpose that we didn’t had everything in place, because first of all we want to test our idea, learn and adapt, before advancing to a more professionally organised initiative — in terms of board and ANBI.

If you are an NGO facing similar issues, these tips might help you as well:



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