The Complete Stripe Nonprofit Guide For Fundraising & Donations
Stripe Payments can be a great tool for tech-savvy nonprofits, particularly those that take most of their donations online.
On the surface, nonprofits are very different entities than for-profit businesses, driven by agenda or purpose rather than maximizing the bottom line. Nevertheless, nonprofits still utilize much of the same infrastructure as other businesses. That includes payment processing.
Since nonprofits may operate on extremely tight margins and grant funding, they’ll want to select a payment processor that offers excellent service at a reasonable price. One possibility is Stripe Payments. Below we’ll break down what Stripe has to offer nonprofits and the pros and cons of using it for donations.
Table of Contents
- Why Nonprofits Should Use Stripe For Donations & Fundraising
- Stripe Nonprofit Rates & Pricing
- How To Create A Nonprofit Account For Stripe
- How To Use Stripe For Nonprofits To Improve Your Donations & Fundraising
- Alternatives To Stripe For Nonprofits
- Is Stripe Payments Right For Your Nonprofit Organization?
Why Nonprofits Should Use Stripe For Donations & Fundraising
Like similar services, Stripe isn’t just a payment processor but a payments platform offering a comprehensive ecosystem. While it won’t be ideal for every nonprofit, Stripe does offer a lot of value under a single service. It also provides some features that will be of interest to nonprofits in particular.
Here are some of the pros of using Stripe for nonprofit fundraising:
- Discounted Transactions: You’ll pay less per transaction for most credit card transactions than for-profit transactions.
- No Refund Fees: Stripe doesn’t charge any additional fees for refunds. You will, however, not be refunded the original transaction cost.
- International Support: Stripe has some of the deepest support for international transactions in the business. If you’re running a nonprofit with global scope, this may be important.
- Subscription Support: Stripe can handle ACH transactions and recurring billing, which can help you lock in regular donations from generous donors.
- Deep Customization Potential: If you have a tech department or access to developers, Stripe can be customized to your specifications.
- Robust Integration Support: Stripe is well-supported by integrations, making it easy to connect with popular accounting and eCommerce tools.
Limitations Of Using Stripe For Nonprofits
Stripe offers a lot of potential benefits to nonprofits, but that doesn’t mean it’s an ideal fit for every organization. Some potential drawbacks to using Stripe for charities include:
- Higher Costs For Certain Features: The standard Stripe package comes with advanced security features such as Stripe Radar by default. Some of these features aren’t included with discounted processing rates.
- The Discount Flat Rate Isn’t All-Inclusive: Most of your card transactions will process at Stripe’s discounted donation processing rate. American Express, however, may actually be charged at a higher rate than what for-profits are paying.
- Account Stability Issues: This isn’t particular to nonprofits but a problem with using third-party processors such as Stripe in the first place. Though they have faster onboarding processes, third-party processors have higher rates of account freezes and holds. Make sure you’re following all of Stripe’s policies to minimize your risk.
Stripe Nonprofit Rates & Pricing
So what are Stripe’s nonprofit rates? Stripe doesn’t charge monthly fees for basic service. Instead, all costs for non-premium features are bundled into a flat-rate transaction cost. Here’s how it breaks down:
- Credit Card Transactions: 2.2% + $0.30
- ACH Transactions: 0.8% (max. $5)
Stripe’s nonprofit pricing will save you 0.7% per transaction. Note that American Express transactions may process at a different rate. You can get a full breakdown of additional fees for Stripe services in our guide to Stripe processing fees.
How To Create A Nonprofit Account For Stripe
Stripe doesn’t have nonprofit accounts per se; you just apply for a nonprofit discount. This can add to some confusion because Stripe uses the base processing rate to determine what other features are included in your account. Here’s how you do that.
- Sign up for a Stripe account
- Email [email protected] with the following information:
- Your EIN or a letter from the IRS designating your 501(c)(3) status
- Confirmation that your primary email address is associated with your Stripe account
- Confirmation that greater than 80% of your payment volume will be tax-deductible donations
Non-eligible donations include membership fees, tuition payments, ticket sales, registration fees, and auction payments.
How To Use Stripe For Nonprofits To Improve Your Donations & Fundraising
Stripe’s discounted nonprofit fees are nice, but you may be wondering how well the Stripe platform can meet the infrastructural needs of 501(c)(3) companies. The good news is that Stripe is a very customizable platform, although whipping it into the exact shape you want may take some technical skills or carefully selected integrations.
Create Custom Donation Forms With Stripe Elements
Stripe Elements can save you the trouble of creating your own UI assets while still giving your donation forms a feel that’s particular to your nonprofit.
Stripe Elements is a feature of the Stripe.js library. There’s also a mobile version available called Mobile Native Elements for Stripe’s mobile SDKs. Each prebuilt element is made to tokenize sensitive information. You can customize payment elements, buttons, and card elements. Additional elements — address and authentication — will be available soon.
Stripe Elements supports 18 payment methods with no additional integrations.
Launch Donations Quickly With Ready-Made Stripe Checkout
If you don’t want to go through all the trouble of implementing Stripe Elements, you have an alternative in Stripe Checkout.
Stripe Checkout is a premade, hosted payment page that offers convenient features, such as one-click payments, CAPTCHAs, and address autocomplete. It’s built with responsive elements, so it should work well on both desktop and mobile devices. You’ll still need to do a little coding to get it up and running, but the actual design elements are handled for you.
To enable donations in Stripe Checkout:
- Enable Stripe Checkout through your Stripe Dashboard.
- Add donation amounts to your Dashboard as though you were adding products.
- Create donation and thank you pages on your website.
- Integrate Checkout into your donation page.
Connect Stripe Payments With Other Nonprofit Software
Stripe’s a big enough name in the payment processing world to be supported by a vast library of integrations for project management, bookkeeping, marketing, and niche payments. Additionally, Stripe’s powerful API makes it possible to design your own should you not find a ready-made solution.
Notable integrations include:
- Zoho Subscriptions
- Paid Member Subscriptions
- Buy Me A Coffee
Set Up Recurring Donations With Stripe
Stripe supports recurring payments. You can implement these directly in Stripe or by using a nonprofit-focused integration that supports recurring donations through Stripe. Recurring payments have an additional fee of 0.5%-0.8% depending on whether you want the Starter plan or the Scale plan. Scale comes with all of Starter’s features plus Stripe Connector for NetSuite and the ability to give customers quotes prior to subscription.
Stripe supports recurring payments through both stored credit information and ACH payments. In most cases, you’ll want to handle subscriptions with ACH payments as they’re considerably cheaper to process.
Stripe Checkout allows customers to self-enroll into recurring payments and supports custom enrollment through your website.
Add To Your Bottom Line With An eCommerce Store
If your nonprofit sells merchandise, you’ll be happy to know that eCommerce is Stripe’s specialty. Stripe integrates with popular eCommerce platforms, such as WooCommerce, Zoho, and Magento.
Further, if you want to use Stripe as a white label processor, eCommerce platforms such as Shopify can grant you access to Stripe without having to do any coding.
Manage Taxes, Reporting & Bookkeeping
If you prefer, Stripe can help you handle your taxes and bookkeeping through — you guessed it — Stripe Tax.
For an additional 0.5% per transaction (or 0.4% if you process over $100,000/month), Stripe Tax will collect all applicable sales taxes for you. If you’re doing business internationally, it can collect the appropriate local taxes or VAT. You can then file your taxes yourself or automatically through one of Stripe’s partners.
Bookkeeping integrations are also available.
Alternatives To Stripe For Nonprofits
If Stripe sounds a little too technical for your nonprofit, or it just doesn’t fit your money-raising strategy, there are alternatives.
- Square: If you’re looking for an alternative third-party processor, especially one that excels at handling in-person transactions, you may want to consider Square. Square doesn’t offer discounted rates, but it does come with a robust set of donation options and a powerful suite of business productivity software. Square charges 2.9%+$0.30 for online transactions and 2.6%+$0.10 for in-person transactions.
- PayPal: Perhaps the most similar competitor to Stripe, PayPal is an extremely popular third-party processor. Where Stripe is oriented toward customization and developers, PayPal is designed for ease of use and implementation. You’ll also be able to access PayPal’s massive ecosystem, which features peer-to-peer transaction support as well as eCommerce and in-person transactions through PayPal Zettle. Registered 501(c)(3) organizations are charged 1.99% + $0.49 for online transactions.
- Dharma Merchant Services: If you’re looking for a more stable option and don’t mind paying a monthly fee, you may want to consider Dharma Merchant Services. Dharma can set nonprofits up with a dedicated merchant account for $20/month. Dharma uses interchange-plus pricing for transactions rather than flat rates, making it a better fit for high-volume processing. Qualified nonprofits can get a discounted processing rate of interchange + 0.10% + $0.08 for in-person transactions, and interchange + 0.10% + $0.11 for virtual transactions.
Is Stripe Payments Right For Your Nonprofit Organization?
Stripe Payments can be a great tool for tech-savvy nonprofits, particularly those that take most of their donations online. Stripe’s nonprofit discount is significant and competitive; just keep in mind that not all donations qualify for the discounted rate. You’ll also want to factor in the supplemental fees Stripe charges for advanced features; these can add up quickly.