Welcome to our comprehensive guide on banking security and compliance for your Impact fund accounts. In this article, we aim to address common questions and concerns related to the management of funds within our platform. Whether you are new to Impact or a seasoned user, this guide will provide you with clear and detailed information on how our banking processes work, ensuring that your money is securely managed and compliant with industry standards.
Our goal is to make your experience with Impact seamless and worry-free, so you can focus on making a positive impact. Below, you'll find answers to frequently asked questions about depositing money into your funds, the types of accounts we set up, the security measures we have in place, and how you can manage your funds effectively.
If you have any additional questions that are not covered in this guide, please reach out to our support team, and we will be happy to assist you. Let's dive in and address your banking-related concerns.
How is money deposited into a fund?
Sponsor organizations connect an external bank account using Plaid. In return, Plaid issues a “payment token” that is securely stored on our platform. When sponsor organization administrators are ready to deposit money into a fund, they can do so from inside the “banking” tab on the fund management page. The Plaid payment token is used to pull money from your linked account into your fund via ACH.
ACH payments usually clear in one business day, but it may take longer with some financial institutions. The balance is checked each time you make a deposit to ensure you do not overdraft your linked account.
Where is the money held when deposited into a fund?
When organizations sign up for Impact, they complete a Know Your Business (KYB) application and establish a bank account with our partner bank, Thread Bank. Each fund that a sponsor organization creates gets its own bank account, connected to their master account. When money is deposited to a fund, it passes through the master account and into the fund account. The account is in the name of your organization.
What type of bank account is set up for a fund?
Each fund you create generates a demand deposit account. A demand deposit account is a fancy name for a “checking account”. Unlike a checking account you might open at your bank of choice, Impact fund accounts are governed by an Account Restriction Agreement which is part of Impact’s supplemental terms of service.
These restrictions are in place to ensure that funds are operated in a compliant manner and support Impact’s flow of funds. For more information, view our supplemental terms of service.
Is my money secure?
Your money is held in an FDIC-insured bank account in the name of your entity. It’s your account (with some restrictions previously mentioned). Your money is not commingled with other organizations’ funds. Money only leaves your fund when scholarships are approved by you and milestones are verified as complete.
We partner with Thread Bank in Nashville, TN. They hold the deposits for both sponsor fund accounts and service organization revenue accounts.
Can I withdraw my money if I overfund an impact fund?
Currently, we do not provide a way to withdraw money from a fund. Money flows out of a fund to champion organizations who you have selected to partner with in providing their programs to your target audience.
Pro Tip: Seed a fund with a small amount of money. If the average cost of the programs in the fund is $500, consider putting in enough money for 25 scholarships.
Example: $500 * 25 = $12,500
You can configure “auto refill” in the fund settings to prevent the fund from running out of money. Customer support is available in special cases to help you with withdrawals.