How To Accept Donations Online: Everything You Need To Know To Improve Your Fundraising
Charitable donations and nonprofit fundraising can range from the simple to the highly complex. A high school French Club fundraiser for going to Disneyland can take just a few hours to set up, but a fancy black-tie gala filled with the rich and famous would take many months of intricate arranging and scheduling.
This article won’t be focusing on the latter (aw, shucks), but if you need to streamline that French Club chocolate sale or even do something a bit more ambitious, such as taking donations to buy toys for sick kids stuck in hospitals over the holidays, we can help.
Below we’ll share some practical tips on how to start taking donations online. We’ll also look at some software tools and services that can help you raise funds for your cause. Read on to find out more!
Read more below to learn why we chose these options.
Table of Contents
- Why Accepting Donations Online Is More Important Than Ever For Nonprofits & Fundraisers
- The Beginner's Guide To Online Donations For Nonprofits
- 5 Nonprofit-Friendly Tools To Accept Donations Online
- Looking For One Of These Online Donation Tools?
- How To Get Donations Online: 7 Tips For Improving Your Fundraising
- What Is The Best Way To Collect Donations Online?
- In Summary: 5 Nonprofit-Friendly Tools To Accept Donations Online
Why Accepting Donations Online Is More Important Than Ever For Nonprofits & Fundraisers
Nonprofits take a lot of volunteers to run, but it’s hard to find people who are willing to work long hours for little to no pay. This is why automating certain processes are necessary, and one of the easiest things to automate is your donation intake process. You won’t need lots of people answering donation phone calls anymore. Once your donation mechanism is set up, you can accept donations at 3 PM or 3 AM, all without you or your volunteers being there.
Taking donations online have many other advantages. For one, recurring donations are faster to set up because the donors simply check a few additional options themselves at the time of their contribution. Same with asking donors to cover your credit card transaction fees, so your nonprofit can get 100% of their donated amount.
Lastly, crowdfunding and crowdsourcing are particularly suited for the online format. With crowdfunding, people all over the country — even the world — can donate to your cause. This would be a much harder endeavor if done in-person and would otherwise have been only the territory of big international charities (such as the Red Cross or Doctors Without Borders). With crowdsourcing, places such as Facebook make it easier to designate ambassadors/team captains to help you raise funds among close friends and family for events (e.g., charity runs).
Lastly, if you wish to send thank you gifts to your donors, online donation sites such as Fundly make it easy by taking care of all the behind-the-scenes work, printing your thank you gift on-demand instead of forcing you to guestimate your needs and order these gifts in advance.
The Beginner's Guide To Online Donations For Nonprofits
The term “online donation” can include a lot of fundraising methods. Below is a non-exclusive list of just a few ways to make online donations:
- Traditional “Donate” Buttons: This is exactly what it is — a link embedded in a button to a no-frills, secure online page where a donor can enter payment information. It might be accompanied by a brief description of your charity or a logo, but its primary function is to take in the donation. This page is often used in connection with other online donation formats.
- SMS Campaigns: As more and more people have cellphones with unlimited SMS messaging, SMS campaigns are becoming increasingly popular. The potential donor receives an SMS message about your charity and a short pitch on why they should donate, along with a link that takes them to a secure web page where they can enter their payment information. In addition to the SMS marketing firm, you’ll have to sign up with a payment processor to process the payments, and that will cost you a per-transaction fee on top of the SMS messaging fee.
- Email Campaigns: Email campaigns are similar to SMS campaigns, except you get to tell your story with more words. A “donate” button that takes a donor to your secure payment page can be embedded in the email. Most email services can set up quite sophisticated campaigns, and you can easily set up recurring emails or a series of emails and then schedule automatic sends of these emails. With some services, you will even know if a potential donor has opened the email or simply deleted it without reading. If you have several fund drives every year, automated emails should be able to save you time.
- Crowdfunding: Crowdfunding is a relatively recent phenomenon, where sites such as Fundly collect money to help a cancer patient or an abused puppy needing corrective surgery. Contributions are taken one donor at a time.
- Crowdsourcing: Crowdsourcing is different from crowdfunding. With crowdsourcing, you ask individual volunteers to help you solicit contributions, such as the walk/run example above. Organizing such drives online makes it easier to keep track of all the teams and their individual contributors.
- Recurring Donations: One of the best reasons to take online donations is that this easily allows your donor to make recurring contributions. Some donors prefer to take a small amount out of their budget every month instead of paying one large amount. The recurring payments feature available at most payment processors can accommodate perfectly.
- Donation Matching: Some large companies have a yearly charitable giving budget, so employees can easily double their giving with their one contribution. There are extensive online databases that make the corporate donation matching process easier for donors. These databases are best suited for online look-up at the time of an online donation.
But online donations do not stop the moment your donor hits the “pay” button. In today’s data-driven world, every donation can tell you a little bit about your donor. With a list of current donors, you can build a database of possible future donors and their donation preferences. The next time you hold a fund drive, you’ll already know which donor is more likely to give so that you can target them first.
5 Nonprofit-Friendly Tools To Accept Donations Online
We’ve gathered a few highly-rated tools that can help you design and manage a fundraising campaign. Some of these tools cover just a few functions, while others can take you from the start to the end of the donation process.
The vendors below appear in no specific order of preference.
Practically everyone’s heard of PayPal, but maybe not everyone knows that PayPal gives a discount to qualified nonprofit businesses. In fact, PayPal makes it easy for your nonprofit to work with them, no matter its size.
Setting up a PayPal donation button to accept online payments is a swift and easy process with the following steps:
- Sign up for a PayPal business account
- Select Nonprofit Organization as your business type
- Select Nonprofit as the category
- Enter your organization’s bank account information to link it to your PayPal account and transfer funds to your bank account
- 501(c)(3) organizations that wish to receive a discounted online transaction fee (2.2% + $0.30 per transaction instead of the standard 2.9% + $0.30 per transaction) will have to:
- Verify its 501(c)(3) status by entering its EIN or providing official documentation
- Provide a copy of a bank statement or a voided check for each bank account linked to the organization’s PayPal account
Once you’ve set up your Donate button, donors will have the option of setting up recurring payments at the time of donation. If you wish to accept donations in-person or sell merchandise related to your nonprofit, you’ll have to go through the PayPal Here program using mobile processing hardware and software. You’ll have to buy the hardware separately, and your processing charge will have a 2.7% per-transaction charge — your nonprofit discount does not apply. If your organization typically processes payments of less than $10, you can sign up for PayPal’s micropayments plan, which costs 5% + $0.05 per online transaction.
Another way to solicit online donations is to use PayPal.Me — PayPal’s peer-to-peer payment platform — to send personalized donation links to your donors. If your charity likes to conduct auctions or sell branded merchandise, you can use PayPal to process these transactions (some auction apps integrate with PayPal). Other software options such as QuickBooks can integrate with your PayPal account to help you keep track of donations. All you have to do is to look for them. PayPal is big and established, so more than likely you’ll be able to find any integration you can think of.
Of course, PayPal isn’t perfect. One of the biggest issues is that PayPal is a third-party processor (also known as a Payment Service Provider (PSP) or an aggregator), so sometimes PayPal might freeze or terminate your account without warning. Another issue is that PayPal is big, so while it carries a lot of nice functionalities for nonprofits, some of these features are bare-bones and not as sophisticated as other providers that focus more on fundraising.
- Can take donations from all over the world
- Offers a discount to 501(c)(3) organizations for online transactions
- A large number of integrations
- Third-party processor, so prone to account instability issues
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Donorbox is an all-in-one donation management software. With Donorbox, you can create a pop-up box and/or have a donation form embedded directly into your website. The donor can donate using a variety of credit cards (including through Google Pay or Apple Pay), ACH transfer, SEPA transfer (similar to ACH but for EU), or even directly with a PayPal account.
With the Donorbox donation form, the donor can pick the amount they want to donate and select whether this is a one-time donation or a recurring donation. They can also choose to cover your card processing fees or even the Donorbox usage fee.
Donorbox has partnered with Double the Donation to allow a donor to determine whether the donor’s employer offers donation matching and, if so, send the donor forms and directions to finalize the matching process. The donor automatically receives a tax receipt for each donation, and you can send year-end tax receipts as well. Lastly, your donor’s information can be saved and kept secure for future fundraising campaigns.
For credit card processing, Donorbox uses Stripe (2.9% + $0.30 per transaction) or PayPal (2.2% + $0.30 per transaction) as back-end processors. The Stripe fee can be reduced if you prove to Stripe that your organization is a registered 501(c)(3) nonprofit, but the PayPal rate is already the rate for nonprofits. Donorbox uses Stripe for ACH transactions, and Stripe charges a fee of 0.8% per transaction, capped at $5.
The fees above are third-party charges. Donorbox itself charges a platform fee for using its software. However, you can sign up for Donorbox for free and pay for the service as you go. For every transaction, Donorbox charges a 1.5% platform fee, but if the donor uses ACH, the charge is capped at $25 per transaction. There are additional services charged separately — for instance, the Employer Gift Matching service is $40/month, and the Salesforce Non-Profit Success Pack is $50/month.
- One-stop-shop for many services
- Automatic tax receipts
- Customizable donation forms
- Pay as you go
- Additional per-transaction platform fee for each use
- Additional payment for additional services
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Like Donorbox, DonorPerfect is a software platform that helps nonprofits manage all aspects of fund drives, from the fund drive mechanics to analyzing gifting data afterward.
With DonorPerfect, donations can be made with credit card payments, ACH/bank transfers, and checks and echecks. DonorPerfect doesn’t disclose which back-end processor it uses, but you will get a merchant account, so you won’t have to deal with account stability issues.
With your merchant account, you’ll be able to have:
- Recurring payments
- Donor’s choice to cover processing costs
- Virtual terminal to take in phone donations
- ACH/echeck/bank transfer capabilities
- Mobile processing capabilities
For credit card payments, DonorPerfect charges 2.2% + $0.30 per transaction (except for American Express, which costs 3.39% + $0.30 per transaction) plus a 0.69% per-transaction DonorPerfect integration fee. For bank transfers/ACH/echeck, DonorPerfect charges 0.75% + $0.35 per transaction. There’s no additional cost for mobile, keyed-in, or international transactions. A DonorPerfect branded mobile swipe card reader is available.
In addition to taking donations, the DonorPerfect platform allows you to do the following:
- Hold email marketing campaigns (including letter/email personalization)
- Construct online donation forms
- Manage your projects through the DonorPerfect mobile app
- Filter/target donors for specific purposes
- Manage donor data (reports, constituent tracking, contact info storage, donor targeting, donor filtering, and more)
- Integrate third-party software/services, such as QuickBooks, ReadySetAuction (live, silent, online auction), Double the Donation, etc.
In addition to credit card processing fees, you’ll have to pay a platform fee to access DonorPerfect. There are five tiers of service/access, and they’re determined by how many constituent records you have. The least expensive tier starts at $89/month for 1,000 constituent records; the most expensive costs $700 per month for 75,000 records. According to one of its videos, DonorPerfect doesn’t have long-term contracts, so there’s presumabely no early cancellation penalty.
DonorPerfect seems like a complicated software, but the company doesn’t dump the software on you and expect you to learn it yourself. Instead, when you sign up, you’re assigned an onboarding team to teach you how to use the software. Afterward, you’ll have access to plenty of webinars to increase your knowledgebase. Later on, you’ll have access to customer support to help you as you grow.
- All-in-one platform to provide a one-stop-shop for an entire suite of services
- No long-term contract
- Well designed onboarding/customer service available
- The least expensive tier allows only 1,000 constituents, which doesn’t seem practical for viability
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If you have a smaller cause/fundraiser — for instance, raising some money as a personal project to help a local animal shelter — you won’t need the sophisticated software of Donorbox or DonorPerfect. You could go with PayPal, but Fundly might be an easier choice.
Fundly seems to target mostly individual fundraisers for smaller efforts instead of formal charities that are registered as 501(c)(3) organizations. The website has plenty of hand-holding information, from using the site to building an effective fundraising page and linking the page to your social media account (the company encourages using Facebook and Twitter). There’s even guidance on how to pitch to a reporter to get media coverage for your cause.
It’s easy to set up a Fundly account — in fact, it’s free. Fundly makes its money from a platform fee that it takes out from each donation you get. So, in a way, Fundly doesn’t get paid until you get paid.
Your donors can use credit cards to donate, and Fundly uses Stripe as its back-end processor (for US and Canadian transactions). You’ll have to fill out additional paperwork to start a Stripe account, but since Stripe is a third-party processor, you can begin taking payments almost right away.
It takes seven days for your donations to clear. Credit card and platform fees are taken out before you get the money, so you never have to worry about overdrawing your funds. The processing fee is 2.9% + $0.30 per transaction for the US and Canada. Fundly is also available for Australian and UK fundraisers, but processing charges differ. Additionally, Fundly charges a 4.9% per transaction platform fee.
Fundly makes it easy for you to send thank you gifts to your donors. Fundly prints on-demand T-shirts, mugs, and similar branded merchandise and charges you at cost. It’s also responsible for shipping, so you won’t have to worry about anything other than selecting a design for the company to print. The charges will be taken out of the transaction before the money is deposited into your account.
- Easy to set up
- Plenty of help for beginner fundraisers
- Probably not the best platform for formally established nonprofits/charities
- Uses Stripe as a processor, so it might have account stability issues
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If you’re running a smaller scale charity or nonprofit, you can take donations without paying anything extra — i.e., no payment processing or platform fees — if you’re willing to run your campaign entirely on Facebook. Given that so many people are already on Facebook, making your campaign Facebook-exclusive probably won’t affect your reach at all.
To use Facebook’s charitable giving tools, you’ll have to first set up a Facebook Business Page and designate it as a page for a nonprofit. You won’t have to show paperwork (e.g., 501(c)(3) organization), but you’ll need to make sure you’ve got the nonprofit category selected to accept donations online for your organization. If you already have a page for your charity and 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 make your changes there. You can add up to three categories.
Once you’re ready with your page and have set up your “donate” button, you can reach your potential donors 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 since Facebook’s ultimate goal is that you purchase ads to boost visibility. That 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
- Allow other Facebook users to fundraise on your behalf by placing your Donate button on their pages
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 tickets.
Facebook, like Fundly, is probably better suited for individuals and smaller charities than larger ones that require more complex money and volunteer time management tools.
- Plenty of fundraising tools
- Huge reach across the globe
- Might throttle your page unless you buy ads to boost visibility
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Looking For One Of These Online Donation Tools?
Below are a couple of our honorable mention donation tools/entities. We dropped them into this section for very specific reasons, as explained below.
Square is in this section because it doesn’t offer special nonprofit rates, so it will treat your charity like just another merchant. Otherwise, it’s a great processor that charges a fair rate while giving all its merchants a great suite of free software that can easily be adapted to take donations.
Square’s fees for nonprofit organizations are the same as its fees for small businesses, designed for organizations that process less than $250,000 per year:
- 2.6% + $0.10 for any tapped, dipped, or swiped cards you take in-person
- 3.5% + $0.15 when you enter in a credit card number manually from the Square POS app, take payment in your Square Virtual Terminal, and process card-on-file transactions, including recurring invoices
- 2.9% + $0.30 for Square Invoices, eCommerce, and Square Online Checkout donations, as these are all web-based transactions
Here are some of the ways a nonprofit can use Square’s services:
- Accept donations online
- Accept donations in-person
- Take donations and orders over the phone
- Recurring donations
- Sell/give away merchandise
- Manage events and registration
- Track donation income and improve bookkeeping
- Collect donor information and increase engagement
As to the negatives of using Square, Square is a third-party processor, so it is particularly sensitive to issues such as chargebacks. If you have too many occurrences, Square might suspend or even terminate your account without warning.
Double The Donation
Double the Donation is a nonprofit-focused service, but it’s typically integrated with other platforms to provide a more robust nonprofit management experience. That’s why, even though you can sign up for its services on a standalone basis, we put it in this section instead of the earlier Best Of section.
Double the Donation takes advantage of corporate gift matching programs that the corporation’s employees may or may not know about. The money is there for the taking, and all it requires is for the donor-employee to submit a few forms. Double the Donation keeps a database of such corporate donors, and your charity pays for access to this database.
Double the Donation starts at $499/year, with the more expensive service costing $3,000/year. You get a 14-day free trial period, and you can cancel the service any time within these 14 days without incurring additional charges. Otherwise, you are billed annually, with automatic renewals.
How To Get Donations Online: 7 Tips For Improving Your Fundraising
There are a lot of good causes in the world, and while yours is just as worthy as the rest, the fact is, every one of these causes is drawing from a limited pool of charity money so they can do their version of good. In other words, you’ll have to compete with them.
We admit that we don’t know the secret to fundraising success, but we have come across various tips that might help in the course of researching this article. We’ve compiled them below:
- Have A Compelling Story: Fundraising is a matter of the heart, so if you can’t reach your potential donor’s emotions, you probably won’t be able to get them to open their wallets. Think about what motivated you to spend an enormous amount of your own time on your charity and write that down in one sentence. Then expand that one sentence into a couple of paragraphs. Let the paragraphs sit for a few hours or days, then reread them. If they move you, then they’ll likely move others. Understand that this is supposed to be hard, but it’s important that you get this one right.
- Start With Those You Know: Your friends and family are the ones most likely to understand your passion, so start with them. And don’t forget that donation doesn’t always mean money — see if they can donate their time too. You’ll need volunteers to help you do all the work that’s ahead.
- Use Social Media: Remember those friends and family that you asked for donations? Ask them to donate their social media contacts too. Make sure you have accounts for Facebook, Twitter, Instagram, and whatever else you can think of (and have time to update). Ask your friends and family to spread the word by liking, retweeting, and generally publicizing your cause outside your immediate circles.
- Set Up A Focused Donation Page: The donation page where people enter their donation information should be laser-focused. It’s the place for people to send you the money, so there should be no distractions.
- Make The Donation Process Easy: Make it easy for your donors to give you money. Give them options on how they want to pay, whether it’s debit or credit card, ACH, bank transfers, or even PayPal. The fewer clicks/buttons they have to hit, the better.
- Contact Reporters: Once you’ve exhausted your friends and family, you’re ready to expand your circle of possible donors. The fastest way to do this is to contact your local reporters. They’re always looking for a good story, and they already have social media accounts or even specific emails set up to collect possible story ideas. Just look at the byline in newspaper articles or watch the local news to find out what these are, then contact them, sending them your already-prepared summary of your charitable cause. Don’t give up too easily if you don’t hear back. Follow up a couple of times, if necessary.
- Tell Your Donors What You Did With Their Money: When people donate, they want to know if they’ve actually made a difference. So tell them. Give updates on your social media accounts. Post pictures and videos of what you’ve been able to accomplish while also telling them what more you still have to do. This way, when you do have to go back and ask for more money, it’ll be easier because they know that their money had an impact.
What Is The Best Way To Collect Donations Online?
In recent years, charitable contributions online and crowdfunding have become extremely popular. One day, you hear about some worthy cause, and the next day, or even just a few hours later, you hear that they’ve taken in tens of thousands, maybe even hundreds of thousands, of donations online. How do you get this sort of publicity, and how do you handle such a large, sudden influx of money once you do get it?
At the heart of online donations is a way to take money, which means payment cards, ACH/bank transfers, and similar. With the tools we profiled in this article, you can easily see and compare your costs of using such services. And if you wish to analyze donor data, we’ve touched on software platforms that can help too.
Just in case your fundraising efforts fall short of expectations, however, you won’t necessarily have to give up. There might be other sources of money (such as loans and grants) that you can draw from. If you’re successful in getting a loan or a grant, that money might be able to tide you over until you can show some actual results from your charitable efforts. After that, you can try again with online donations.
Whatever you do, be persistent. Nothing worth doing is easy, so if you feel strongly about helping others in some way, keep at it, and, one day, you’ll get the donations you need.
In Summary: 5 Nonprofit-Friendly Tools To Accept Donations Online
- PayPal: Best for offering qualified nonprofits a discount.
- Donorbox: Best for an all-in-one platform specially designed for nonprofit fundraising.
- DonorPerfect: Best for a robust all-in-one platform specially designed for nonprofit fundraising that has great customer support.
- Fundly: Best for a beginner fundraiser.
- Facebook : Best for free fundraising tools, no platform fees, and no card processing fees.