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September 29th, 2017

8min Read

[Guest Post] Payment Acceptance: A Nonprofit Fundraising Revolution

One of our software integration partners, nonprofit solution provider Salsa Labs, has shared some helpful tips for nonprofits new to collecting credit card payments from donors. We’ve got them below!

Integrating payment acceptance into nonprofit software management has majorly impacted fundraising strategies across the board.

From peer-to-peer to crowdfunding to mobile giving, fundraising is easier than ever and proceeds with fewer payment restrictions. Integrating payment processing tools into your fundraising strategy allows nonprofits to cater to donors who are on-the-go or simply don’t carry cash or checks.

We’ll cover all the basics of payment processing that you need to know, like:

  1. What is payment processing?
  2. Why is a payment processor important?
  3. What forms of payment can a payment processor accept?
  4. How does payment processing work?
  5. How have payment processors affected nonprofit fundraising?
  6. Is payment processing secure?
  7. How much does payment processing cost?

For an even more in-depth look at payment processing and how it relates to fundraising, check out Salsa’s Payment Processing Crash Course. If you’re ready to learn more about how a payment processor can positively impact your fundraising strategies, let’s dive in!

Payment processing for nonprofits occurs when a donor makes an online donation in order for the nonprofit to receive the contribution.

It’s a necessity for things like online donation forms, text giving, and other mobile and online fundraising platforms.

As mentioned, a payment processor is essential. Without one, your nonprofit can’t accept donations or contributions from any online platforms.

With the continually rising popularity in all things digital, not working with a payment processor will only result in lost donations for your organization. Avoiding a payment processing solution will only hurt your nonprofit in today’s world.

Accepted forms of payment will vary from vendor to vendor, so it’s important to ask your potential provider what payments they accept when considering their software.

Most solutions will accept Mastercard, Visa, Discover, and American Express. Because these are the most universally used credit cards, your nonprofit will be missing out on donations if you work with a processor who can’t accept all four.

Plus, it’s been proven that credit card users spend more than those who pay with cash, so accepting credit cards is a beneficial improvement when it comes to fundraising!

Aside from credit card payments, look for a processor that will let you accept ACH debit payments, too. Unlike credit card payments, ACH, automated clearing house, debit payments are made directly from your donors’ checking account. These payments are also described as electronic checks that can be used to make contributions to your organization.

Payment processing takes a few quick steps to get the donation from the donor’s hands to your nonprofit. A typical transaction will go something like this:

A supporter makes a donation.

The process begins when a donor makes a contribution or purchase through an online or mobile fundraising platform. The software being used to accept a donation is likely integrated with a payment gateway. The payment gateway, also known as middleware, is used to securely transmit the cardholder data to your payment processor. Your payment processor then verifies the necessary funds and authenticates the donor’s card and demographic information. The transaction will be halted here if there is an issue with the donor’s method of payment and the donor will be informed. If not, the transaction will continue on.

The donor’s information is stored in your database.

With every online donation comes more donor information! Depending on your online donation form, your organization will be able to collect information from your donors including:

  • Name
  • Email
  • Address
  • Phone number

If your online form includes more fields, you might be receiving even more information than our list. Nonetheless, all the information gathered from online or mobile donations will be logged into your database so long as you integrate your payment processor and your donor management or CRM software.

When you’re shopping around for the best payment processor, you’ll most likely want to look for a vendor that integrates with your current donor database for less hassle all around.

The contribution is deposited in the nonprofit’s account.

Like you probably expected, the final step is depositing your donations into your nonprofit’s account. These funds will most likely be transferred into your account within one or two business days.

As previously mentioned, payment processors allow nonprofits to accept more donations more often and in more places! From giving kiosks at events to online donations, your nonprofit can accept a donation from a credit card at any point in time, eliminating the need for donors to always carry cash and allowing your organization to gain more profit.

Let’s look at other ways payment processing can impact your fundraising strategy.

Payment processors allow nonprofits to securely process transactions.

A payment processor is implemented for security measures that allow your organization to keep your donors’ personal information secure. With a reliable payment processor, your nonprofit reduces the risk of a security breach.

If your donors know you’ve implemented a payment processor, they can give digitally with ease! (We’ll cover payment processing security more in depth in the next section.)

Payment processors allow nonprofits to record donor information.

Like we mentioned in section 4, your payment processor collects tons of donor data thanks to your online donation form. Your payment processor might be able to help you capture names, addresses, emails, phone numbers, and even more, which you can transfer to your donor data management solution.

It all depends on how integratable your payment processor is. Remember, the better you know your donors, the better and more targeted your approach will be!

Payment processors allow nonprofits to retain more donors.

All nonprofits know donor retention rates are scary, rising to more than 40% most recently. But with your payment processor’s secure methods, your donors feel encouraged and motivated to give again, therefore, improving your retention rates.

Investing in a strong and secure payment processor will show your donors you care about their informations’ safety. Valuing your donors’ wellbeing will only prove positive in how they look back on their donation experience with your organization.

Payment processing makes online fundraising easier overall for both your nonprofit and your donors. Plus, it gives your donors the ability to quickly automate recurring payments.

When you’re searching for a payment processor, look for a vendor that is PCI compliant. The Payment Card Industry (PCI) created data security standards to protect customers and merchants in online transactions.

Merchants or organizations that are in violation of the security standards may face penalties and are irresponsibly putting customer and donor information as risk. The necessity of PCI compliance reassures your supporters that their information is safe. Many donors give up on online contributions because they feel their card information might be compromised.

There are even more security measures, some of which PCI compliance requires, others your payment processor may put in place:

  • Tokenization, a form of data encryption, takes important information like your donors’ credit card numbers and replaces it with a string of symbols, both letters and numbers, in efforts to protect it.
  • Encryption converts your donors’ data into cyphertext, which can only be read if opened with the right key, yet another obstacle for hackers. NorthWestern University is using point-to-point encryption (P2PE)! Read about it here.
  • IP (Internet Protocol) Blocking restricts connections from IP addresses that are fraudulent.
  • Bank Identification Number (BIN) Checking informs your organization that an ACH debit donation is authentic.
  • Address Verification System (AVS) verifies the billing address of the donor to the billing address of the credit card.

Payment processing solutions are mandated to follow PCI compliance regulations, making online donations and transactions secure. While all payment processors must be PCI compliant, nonprofits might also want to look for processors who implement additional security measures at no extra cost. It's not just a matter of finding a processor who is PCI compliant, but finding one who really prioritizes security!

Take a look at CardConnect’s 5 Crucial Ways to Help Keep a System from Harm for more security tips.

Many providers will charge one flat fee for ACH debit payments and a flat fee and a percentage for credit card payments.

Flat fees might include payment gateway fees, PCI compliance fees, monthly service fees, and reporting fees. In other words, your flat fee covers the price of using their processing payment solution.

Per-transaction fees, on the other hand, are charged each time a supporter makes a contribution to your organization online. This fee is a cut from the credit card companies.

Typically, most payment processing solutions will charge a flat and per transaction fee that might look like a percentage and a stable number, so your charges will look like this: 2.7% + 30¢.

As with any software investment, you’ll want to plan for additional fees. Charges like chargeback fees, insufficient funds fees, and more may come into play if there is an issue between a nonprofit and a donor.


Now that you’ve read up on payment processors, it’s easy to see how they’ve changed the fundraising world for good. Payment processors have made the process of online giving easier and more convenient for donors, encouraging donations even more.

Knowing that, your organization can excel in online fundraising once you partner with a payment processor. Happy fundraising!

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