How To Accept Donations Online
If you have a nonprofit organization, providing a completely secure and convenient way for your donors to send payments online is probably a pretty high priority on your list. If you’re not sure what types of solutions are out there, you’re in the right place. Whether your charity needs a better online presence with an updated site, or you need to improve engagement with current and prospective donors, you certainly have a myriad of options! In this post, we’ll explore an overview of each approach, so you have a better idea of what deserves more of your attention.
In all of these options, take into consideration who your potential supporters are and how you interact with them. Think about what’s currently working for you, and what you need to develop for growth. For instance, do you need to create a site? Do you need an organized database of customer information? A better process for recurring donations? Let’s dig into the possibilities for taking online payments and much more.
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Donation Management Software
In addition to payment processing, donation management software focuses on the CRM (customer relationship management) aspects of running a nonprofit organization. Data collection, tools for outreach, as well as nurturing existing donors are all components of good donation management software.
You’ll find a wide range of pricing when it comes to this type of software. We found companies offering their SaaS (subscription as a service) products as low as $10/month and as high as $15,000 + annually for mid to large organizations for managing complex donor relationships. Of course, which services come along with the core offering also varies significantly, but that means you have a lot of options, too.
Generally speaking, you’re going to pay more for the convenience of an all-in-one software platform than if you were just shopping around for a payment processor, both in terms of monthly costs and transaction rates. Some companies will allow you to choose from a handful of compatible payment processors, while others offer their own built-in processor.
When considering donation management software, consider what you may need for your size organization. In addition to online payment processing, here are a few services that may be included for nonprofit organizations:
- Pledge Management
- Grant Management
- Donor Discovery
- Campaign Management
- Contribution Tracking
- Gift Matching Management
- CRM Tools
- Alumni Management
- Event Management
- Auction Management
- Recurring Giving
- Volunteer Management
Donation management software can be a great tool for your charity to improve in specific areas listed above. However, if you are just looking for a way to process payments in-person and online, and need some tracking and reporting capabilities, payment service providers may be a cost-effective option for you. You’ll get lower rates in exchange for fewer extra frills, so to speak. As you’ll see in the section below, some payment service providers also offer CRM integrations. These options can be nice to have your payment processing and outreach tools working together from the same database, though you’ll pay for the two separately. Let’s take a look at some payment service providers for taking online donations and more.
Payment Service Providers
A payment service provider is first and foremost a credit card processor, but these types of companies typically have very robust offerings that support online charities and merchants as well. While the term payment service provider may not ring a bell to you quite yet, you’re likely familiar with some of the biggest in the business: Square, PayPal, and Stripe. What makes companies like these different from traditional merchant accounts is that they are actually third-party processors. While we could devote a whole post discussing the technical details of this type of arrangement, we’ll say this: Payment service providers may offer more choices in payment processing and fewer hoops to jump through to get started — but they aren’t for everyone. Be sure to follow the links and learn more about each specific option so you can make the best decision for your nonprofit business.
Square (read our review) offers a variety of options for taking payments online. The simplest and fastest way to set up your online store is to pick one of the templates that Square offers and set up a free online shop. Your customization options are limited here, but you can add donation buttons in the Site Editor. Back in the editor, you can add whatever images you like as well as sections for fundraising tickets, merchandise, buttons to accept donations — or a combination including all of the above.
If you already have a site or you are building a custom site, you can also integrate your Square account with popular eCommerce software like WooCommerce, WordPress.com, or Weebly, just to name a few. The integration option requires minimal technical expertise while giving you more freedom to make a site that feels more like your own. However, Square offers yet one more option for customizing your checkout and donation process. You’ll find free developer-friendly tools so that you can customize online and in person with their API.
No matter what solution you choose, you can also send recurring invoices. You can schedule and set donation pledges for your donors, and track all activity right from your dashboard. Of course, you’ll also have a customer directory so you can collect phone numbers and email addresses, and save a card on file for those who opt-in. Square also offers a suite of add-on services like marketing CRM so you can quickly create an email campaign to follow up and engage your contacts for fundraising, donation goals, and more!
Square offers nonprofit organizations the same rates as everyone else, but Square’s rates are some of the most transparent in the business, with no additional fees for PCI compliance (payment security), no monthly fees for processing, and no contract or cancellation fees whatsoever. Setting up an account with Square is also very easy, and is often the best way to dig in to test all of the possibilities. Check out our article, How To Accept Online Payments With Square, for an in-depth look at the company’s ecommerce tools as well.
From adding a button to the top of your website to more in-depth developer tools that integrate with your site, PayPal offers a plethora of support for the nonprofit business. Here are a few of the options you might want to check into when it comes to taking donations:
- Donate Button: Accept credit cards, debit cards, and PayPal by adding a simple donate button to emails, web pages, and campaigns. Your donors can also select automatic monthly donations, too!
- Express Checkout: If you choose to go with a different processor, you can also add a PayPal button to your site with Express Checkout, which simply adds a new option to pay during the checkout process.
- PayPal Here: It’s worth it to mention that you also can process in-person payments at events with PayPal, too! PayPal Here is a card reader that allows you to process in-person payments of credit or debit cards.
If you’ve registered your nonprofit as a 501(c)(3) charity, you can also enjoy shaving a bit off of your transaction charges. PayPal’s nonprofit transaction rates are 2.2% + $0.30. For online solutions, PayPal has more than you may expect, so check out our full PayPal Review for pros, cons, and more.
Stripe (read our review) is a great option for your nonprofit if you are looking for virtually unlimited end-to-end customization and have you have access to developer expertise. While Stripe may not have the dinner-table name recognition of Square or PayPal, it’s one of the most prominent payment service providers. Stripe is the behind-the-scenes processor for some of the biggest national and global brands, including Facebook, Adidas, Lyft, and Under Armour.
What makes Stripe different than Square and PayPal is that you won’t have the processor’s payment brand on your button — Stripe is essentially a “white label” option which leaves you to create your own messaging on buttons and customize the entire checkout experience.
While Stripe doesn’t specify the types of fee discounts for nonprofit organizations, their support page instructs any business with a nonprofit status to email support for more information. For more information on basic pricing as well as billing and customer engagement tools Stripe offers, visit The Complete Guide To Stripe Pricing And Costs.
SMS Text Messaging
Engaging donors and accepting payments through text messaging is a growing trend, one that we can’t neglect to discuss. You’ll find a variety of SMS messaging services out there that offer unique levels of support and different pricing structures to boot. So how does it work? SMS text donations essentially direct the customer to an online, secure payment form hosted by the credit card processor. Some credit card processors provide support for SMS; other SMS tools are focused on the customer engagement portion and they integrate with various processors and provide detailed donor tracking and reporting.
Most SMS companies we looked at do integrate with Stripe as a payment processor, but one company, called Pagato, also integrates with Braintree and Quickbooks Payments. For more information about taking donations with SMS payments, check out What Is An SMS Payment And How Does It Work?
Online Donations Through Facebook
Creating a presence on Facebook could be your primary way to reach out for donations online or just a reinforcement. The great thing about this platform is that its entirely free to set up a page, and Facebook doesn’t take a cut of your donations — you keep 100% of every donation. The other thing that may work in your favor is that many people are already on Facebook, and you can get your message (and your donate button) out to hundreds or thousands of people at a time. Reach people through social shares, live feeds, and of course, paid Facebook ads. Keep in mind that Facebook may throttle your page’s visibility to your followers, however; the ultimate goal of Facebook is that you purchase ads to boost visibility. Nothing is free, and that includes visibility to all of your followers on Facebook. That being said, Facebook has some nice tools for charities. Here’s what you can do:
- Add a donate button on your page and posts
- Create fundraisers
- Set up donation matching
- Add a donate button on live videos
To use Facebook’s online donate button, you’ll need to have a Facebook Business Page that’s categorized as a nonprofit. You don’t have any bureaucratic hoops to go through on Facebook’s end, but you’ll need to make sure you’ve got the nonprofit category selected to accept donations online for your organization. If you need to edit your page’s category to a nonprofit, all you do is head to the About section on the left side of your page and edit the category there. You can add up to three categories. Below is a screenshot from Facebook’s help section so you can see how simple it is to edit your category from your Facebook storefront.
If you are having a fundraising event at a physical location, you can also create an event through Facebook or link your Eventbrite page to Facebook, so your followers can click to buy a ticket.
At the beginning of the post, we talked about payment service providers, which are third-party processors that act as one umbrella merchant account with merchants being sub-users. Merchant accounts, on the other hand, provide a more direct solution that has some benefits. While you’ll have to go through a rigorous application process to open an account, and it’s not necessarily instantaneous like Square, you can typically expect good one-on-one customer care and communication if any issues arise.
We definitely have our favorite merchant service providers here at Merchant Maverick, but is this solution right for your nonprofit? Consider your monthly donations. Merchant accounts are best for larger organizations that process close to $10k or more in donations a month. At this volume, you’ll likely start facing significant cost savings by switching from a third party processor to a merchant account. In fact, many merchant accounts will only open an account for you if you’re processing around that range.
One of our favorite merchant accounts for nonprofits is Dharma Merchant Services. You’ll be hard pressed to find a company with more stellar reviews and who really has a heart for the nonprofit mission. In fact, they offer nicely discounted rates for nonprofits! Merchant accounts like Dharma are also typically really good at offering even more ways to take payments like ACH and automatic recurring payment solutions. As far as integrating payments online, Dharma uses Authorize.net, which is quite possibly one of the most compatible solutions to integrate on a wide variety of platforms. You’ll also have a lot of options in Clover hardware for in-person payments. For more information about the services Dharma offers, visit our full Dharma Merchant Services Review.
By now hopefully your gears are turning, and you’re feeling inspired to explore your options. Of course, your solution largely depends on your core needs. Accepting payments online is an integral part of fundraising but ongoing engagement is also a vital part as well. Choosing an option like Square that gives you flexibility in more than just payment processing can help you launch your online presence quickly and continue to engage those who give. But if you’ve already got a site you love, the ease of adding a payment button with PayPal or a fully branded checkout experience with Stripe or Dharma is also a fantastic option. Do you have any questions about accepting online payments for your charity? We’d love to hear from you in the comments below.