Some nonprofit concerns are very much in line with the standard challenges faced by their profit-driven counterparts. And some of their needs mirror those seen in state organizations in the public sector.
Case in point: accepting payments. While the transactional mechanics are largely identical — money is changing hands, moving from one side to the other — everything else is different. Including the terminology. It’s not a “purchase” or a “sale”; it’s a “donation.” As such, non-profit organizations still need to use “merchant services,” but will also need those services to support a very different type of transaction.
So, for these teams that need such a solution but don’t know where to start their search, we’ve compiled a round-up of top contenders, an overview of their benefits and downsides, and a brief breakdown of the optimal use cases for each.
In addition to pricing, what is worth clarifying, and isn’t necessarily intuitive at a glance, is the distinction between payment processors and donation platforms. Processors are likely already familiar to you — they are the ones that handle the exchange of funds, or at least take point on that process. Donation platforms are different. In the majority of cases, they don’t process at all, but partner with another brand to provide those services.
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| PayPal | ||||
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| Stripe |
Our rating: 4.49
Let’s kick off our list with a clear example of a donation platform, so we can add more clarification to that point.
Donorbox is a platform built to support and enable the operations of nonprofits. Similar to how a CRM solution might cater to the needs of sales or support teams, donation platforms come loaded with bells and whistles curated for organizations that collect funds without exchanging a good or service for them (in other words, the dictionary definition of “donation”).
Donorbox is a leading player in that space, and while it doesn’t process payments itself, it has plenty of integration and interoperability options. Bottom line: if you want a solution vendor that understands your use case well, already has foundational knowledge of your typical needs, and offers tailor-made features that directly address those needs, Donorbox is your best bet.
Any time you have a use case with very particular parameters, industry-specific tools will be your best friend. As a leading provider of donation platform solutions, with positive customer feedback and an impressive track record, Donorbox is a major contender by any stretch.
One of Donorbox’s standout features is recurring donations. The same way an ecommerce platform might enable sellers to set up monthly product subscriptions for their customers, Donorbox can enable donations to be set on a repeating schedule. That way, those who want to give regularly can set-it-and-forget-it, so to speak.
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Our rating: 4.41
PayPal is obviously not a donation platform; it’s a widely used payment solution across the business world, as well as among consumers. Despite this, it actually serves very well as an entry-level solution for nonprofit organizations.
The familiarity and simplicity of PayPal’s interface are already huge advantages, as is its no commitment, no monthly cost, no hidden fees pricing structure. But, PayPal also offers reduced transaction fees for nonprofits, while still providing the same trustworthy and dependable service that for-profit operations have relied on for years.
Again, PayPal is not a donation platform. It is, however, one of the most popular processors used by donation platforms. So, if you’re not quite at the point yet where the advanced functionality and add-on features are worth the investment, there’s a distinct value in cutting out the middleman and reducing the number of additional fees that have to be paid each time a donation is made, regardless of who picks up that particular tab.
And since PayPal has been around so long, and so widely adopted, it’s both an incredibly familiar user experience, and easy to find compatible integrations for. In short, there are few payment solutions that can get you up and running faster.
*Note: the “fixed fee” is a predetermined fee based on the currency received for payment.
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Our rating: 4.34
True to its reputation as an industry pioneer in user-friendly POS solutions, Square is our pick for the best option for accepting in-person donations. Like PayPal, Square isn’t a donation platform, or donor management system. It is, first and foremost, a payment solution, and the majority of what it has to offer falls under that umbrella. Despite this, it still has plenty to offer nonprofit organizations.
In fact, beyond card readers, payment processing, and the like, Square offers a number of adjacent features. Normally, these would be “business services,” but they can easily be repurposed for this use case. Their CRM functionality, for example, can be leveraged to send newsletters, manage donor groups, collect feedback, track data to help identify issues or fundraising trends, and more.
Nonprofits thrive or struggle based on the support of their donor base. It follows, then, that the better equipped you are to grow and nurture your donor base, the healthier your organization will be in the long run.
This is why I picked Square. Its POS hardware enables you to accept donations in person, encouraging you to mix and mingle with the people, businesses, and organizations that provide the lifeblood of your mission. And their add-on services, like their CRM tool and payroll, can help you run your nonprofit the way a business would.
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Our rating: 4.31
In the non-profit space especially, there will be circumstances where cost is the most impactful factor. For organizations that need to make the most of every donation dollar that comes in, Helcim is our pick to keep those costs down as far as possible.
To start, Helcim offers some of the lowest standard rates in the business, across a wide variety of payment types. What’s more, Helcim also offers pass-on fees, so that donors can pay the cost of making their donation. As a prominent player in the payment processor space, Helcim has plenty of positive points to promote here. But the way they help nonprofits minimize the costs of accepting donations is the most critical among them, in my opinion.
As alluded to above, few vendors in the payment processor space offer as many options and opportunities to limit costs and reduce fees. Those figures can really add up, depending on the cost structure of the platform you’re using. Even features like fee caps can only do so much, especially if much of your fundraising aims at collecting large quantities of smaller donations.
For those reasons alone, Helcim is a solid pick, and all of their other features (many of which are comparable to brands like PayPal, Stripe, Square, etc.) are just icing on top.
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Our rating: 4.22
iATS is the oddball on our list. It’s the only entry that provides donation management and payment processing. As a platform built specifically for nonprofit organizations, and by combining the management tools and the processing services, iATS achieves high levels of value and customer satisfaction while maintaining reasonably affordable rates (though they don’t list said rates publicly).
It’s uniquely suited to the needs and circumstances of organizations in this space, and while it’s not a perfect fit for everyone, it is a perfect fit for those that fall within the parameters of their optimal use case.
Since iATS only serves nonprofits, the solution has been curated and expanded to meet those very eclectic tastes, as it were. It’s led them to reach impressive levels of customer satisfaction as they empower nonprofits and charities around the world.
Case in point: one of their biggest bragging rights is that after 20 years, their first customer is still their customer (indicating both the quality of iATS’s service, and the success they’ve helped that nonprofit achieve).
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Our rating: 4.12
Stripe, like PayPal and Square, are leading names in the payment solution space. They primarily cater to businesses but have a few particular features aimed at nonprofits. And though many of their offerings and benefits are comparable, each has at least one aspect where they have the edge over the others.
For Stripe, it’s the speed of delivery of funds. Yes, it’s highly customizable, easily tweaked to embed or integrate into various channels, and offers plenty of business services as add-ons. But standard payouts are daily after a two-day delay, and you can opt into instant payouts for a nominal additional fee.
Not everyone needs money in hand as soon as it’s sent. But for those who do, Stripe is our recommendation.
In a nutshell: get your funds as fast as possible. It’s Stripes’ most impressive and standout feature in this context, at least in my opinion. Stripe also has industry-leading API and SDK documentation if you need a custom donation page, app, or checkout. Additionally, if you accept international donations, Stripe is our top-recommended international payment gateway.
For more information, read our full Stripe review.
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Choosing technology solutions can feel a lot like choosing a car to buy. The same kinds of qualities and characteristics come into play each time; it’s just a matter of what the buyer needs from the “vehicle” at that point. Price, reliability, flexibility, customizability — you know the drill.
So instead, let’s talk about the less common stuff.
This matters to a surprising degree. Many of the discounts are conditional on properly registering and/or verifying nonprofit/charity status. In other words, where you have to register, and whether or not your nonprofit qualifies can heavily impact the costs applied to the donations you collect. So we recommend you check the fine print (and maybe even call in to get the nitty-gritty specifics).
Some solutions will be more advantageous if you collect fewer donations with higher dollar values, while others are the opposite. Some will give you options for high-volume discounts. Some will give you tools to work towards a larger footprint in the public consciousness. Some will allow you to pass on donor fees, and some donors may not actually be fond of that (though that last one seems to be the exception, not the rule).
What we’re trying to say is this: the nature of your donor base, who they are, how much they donate, and the way they interact with your payment solution all matter a lot more than they typically do for businesses. In a nonprofit context, people give you money not because they’re buying something but because they believe in the cause and want to help. And even small issues or inconveniences can sometimes be the difference in securing the donation.
A number of providers and solutions (including some in this list) take into account whether donations are domestic or international. They may even take into account the specific currency of origin. Depending on your circumstances, that may indeed markedly impact the figures for your organization. So, if you have access to that information, use it when vetting solutions to see if you’ll be underserved by a given platform.
I had to do a bit of extra digging and research on this topic. That said, in the end, we built our list much the same way we always do. We started broad, looked at the major players and frequently mentioned options in the space, and whittled things down from there. Then we graded said shortlist, and assembled the relevant info into this article.
Our list, and our grading, was done based on critical core factors, including pricing, software features, hardware options, user experience, and reliability. We consulted branded marketing, review aggregator sites like G2, hands-on demos, and free trials, as well as feedback and reviews from current and past users.
We paid particular attention to areas of functionality that were non-standard, if they were mentioned in the brand’s marketing as an available feature, and whether or not reviews indicated it worked as described.
Here’s the specific criteria that were considered:
It’s always difficult to get a comprehensive picture of what a tech solution has to offer, especially when you’re not able to field test every processor directly or explore how it performs in different niche use cases. We’ve done our best to close that gap here and “fumble in the dark” on your behalf, to help you avoid doing the same at much greater cost to your organization.
