Nonprofit Online Donation Vendor List

E-commerce is the ability to sell products and services on your website. But more than that, it’s the ability to take payment for those items on your site too. In the context of nonprofit websites, e-commerce also means the ability to collect donations and take contributions. As OrgSpring helps to make nonprofits more tech-savvy, E-commerce is the most requested feature we get for new websites. That’s why we’ve put together the Nonprofit Online Donation Vendor List, a collection of 50+ online donation and processing gateways to help you take donations online.

Nonprofit Online Donation Vendor List

 

We’re also launching a new web tutorial series that will help you understand online donations and how to process them directly on your website using a few simple tools. This will help you avoid the mess that is currently the online donation processing industry. It will also help you to avoid ridiculous fees charged by many of these vendors for a service that is fairly easy to provide with the state of current technology. We’ll be publishing links to that over the next few days. Stay Tuned.

 

View the List Now

 

Understanding Online Donations

Before we get into using the list, it’s important to understand how online transactions work. There are only a few ways to transact business online:

  1. Pay by Cash / COD
  2. Pay by Check
  3. Pay by Credit or Debit
  4. Use a third-party service, like PayPal, Google Wallet, Apple Pay, Bitcoin, etc

That’s it, really.

Cash is obviously not an online form of payment, but there are still vendors who sell products online with a form of payment as COD. Check payment is still very popular. A customer orders online, or completes a donation. That is marked in the online transaction system and not actually recorded into the books until the check clears. For the nonprofit, even those using e-commerce systems, accounting for check donations is still somewhat of a manual process.

In reality, there are only two forms of pure online transactions: the credit or debit transaction and the third-party service. These are two methods where money changes hands electronically and in which the entire process is complete online instantly. Funds can be confirmed sent and received instantly between banks and vendors, products can be shipped and donations marked complete. These last two methods are where we’ll focus our time, and the methods used by every vendor on the nonprofit online donation vendor list.

 

Credit Card Processors and Gateways

In your research, you may come across the terms “Credit card processor” and “Payment gateway.” These are two types of vendors that deal with credit cards, and I’ll explain what they mean.

Credit card processors are companies that can process credit cards. These are typically the credit companies like Mastercard, Visa, Discover, Amex, etc. They are the ones providing credit and pushing money between credit companies and banks and merchants. These guys control the entire credit market. Plain and simple. They set the fees, terms, and ridiculously complex agreements you sign when doing business with them. They are basically a combination between a bank and an insurance company. They underwrite risk, assess default, and set rates. The rates they charge are called interchange rates. They are based on volume and number of transactions, among other things. In terms of fees  – everyone pays the credit card companies – even the largest companies in the world, like WalMart, Target, Ticketmaster. They all have to pay Visa its brethren for the ability to take cards online. But, believe it or not, credit card processors don’t even deal with these companies directly. To cover their asses legally, and to create even more obfuscation than should be necessary, in most cases, they require you to use third-party companies called payment gateways.

Payment Gateways are companies authorized to charge credit cards on behalf of credit card processors. These are 3rd party companies which create software and tools that allow you to take payment online, over the phone, using a terminal, etc. They charge the card using one of the payment processors and business is done online. They provide reporting for you and support when you need it. These gateways have to pay the credit card companies too, so they basically pass that cost onto you plus a fee of their own profit.

So, if the interchange rate on a credit card transaction is 1.75%, a processor might add another 0.5% to that making your total fee 2.25%. All you ever know is the 2.25% because that’s what the gateway quoted you. But so you know, that’s how it works. The CC companies are always getting paid.

Most gateways provide basic software and support. They don’t really help you with integrating that software into your own websites. This is where other vendors come in. They use the technology and processing software offered by the credit card companies and gateways and pass that through their own software which makes it all available online for you in an efficient and easy-to-use system.

As you can image, there is quite a bit of competition out there amongst these vendors. That’s why we put together the Nonprofit Online Donation Vendor List. To help cut through the noise you might encounter when shopping for such a service.

Generally speaking, using a gateway direct will be cheaper by a few basis points, in terms of processing fees, than using a third-party vendor, especially if you’re dealing with a significant amount of volume, say greater than $20,000 in donations online per year. At that price point, the fees charged can really start to add up.

However, the vendor offers an ease-of-use and support that cannot be matched by most gateways. As such, their utility is often worth the extra charge. Take it from us – after using gateways for years, the constant phone calls to support meant time we weren’t doing our work, and that cost us more than the fees we paid them. In the end, we went with a few of the vendors on our own list and haven’t looked back. In actuality, our online transactions have increased over time and our fees are the same or lower (percentage) than they were with the gateway.

I believe that over time, the third-party gateway will be obsolete. We’re already starting to see it. Companies like Mastercard are starting their own gateways – like Simplify Commerce, to offer online transactions through shopping carts like WooCommerce and others.

 

My Experience with the Vendors on the List

I have personally tested each and every vendor on this list. I’ve had active accounts or trial accounts with each one. In the case of paid software, I either bought the software of my own volition or through OrgSpring, or was part of an organization that already used the software. In no cases did I take free software or use a system in exchange for a review.

This is not an exhaustive list. New vendors come on the market every day, and some vendors close up shop. If you are an online donation provider and don’t see your name on the list, send me a note with your info and I’ll check out your system. I do plan to keep it up to date though.

How to Use the Nonprofit Online Donation Vendor List

Visit the Nonprofit Online Donation Vendor List which is published publicly via Google Docs. At some point in the future we may turn this into a searchable database but for right now it lives as a google doc and is a flat sheets document.

Across the top row, just under the title of the doc you’ll see two links. Clicking those links will take you to one of two active tabs:

  1. Active – these are sites and vendors confirmed active as of the writing of this post
  2. Inactive – these are sites and vendors that were offering services, but are no longer offering products or services as of the writing of this post. This is important to know, because we can track price changes over time and movement of developers and executives from one company to the next

 

The shaded header row brings us into the main document and includes the following columns, from left to right:

Web Platform – This is the framework on which the vendor’s software can be used. HTML means the software can be integrated with a standard HTML websites. WordPress is for integration with WordPress powered websites.

Access – This is how to software is accessed. 3rd party means to make a donation on your site, the donor would be linked off to the vendor’s website and taken away, even if only momentarily, from your site. On-Site means the donor can stay on your website to complete the transaction. This is important, because research shows clearly that cart abandonment increases when donors are taken off your site. Keeping donors on your site is ALWAYS best.

Name – This is the name of the vendor or the online donation tool. Where applicable, we’ve included a link to the vendor here.

Monthly Fee – This is the fee charged by the vendor to use the service. In most cases, this is a monthly service fee. In some cases, it’s an annual fee, but we’ve divided it down into months for comparison here on the sheet. In these cases, we’ve made that note in the Notes section. This fee is charged to you regardless of the number of transactions you do or the volume of your donations.

Volume Fee – This is the fee the vendor charges based on the volume of your transactions run through the system. For example, if you take $10,000 of donations through a system with a 6.9% volume fee, you will be charged $690. That means the vendor keeps $690 of your money from the $10,000. This fee goes to cover the cost of the credit card interchange rate and other fees the vendor must pay to process the cards for you.

Transaction Fee – this is a fee the vendor will charge every time a transaction is completed. These are usually just pennies per transaction. For instance, a vendor might have a 4% volume fee with a $0.30 transaction fee. That means on a $100 donation, they will be taking out $4.30. $4.00 for the volume fee (4%) and $0.30 for the per transaction fee.

Other Fee – These are additional fees charged by the company to start your account. Call it what you will – origination fee, setup fee, etc. They’re junk and you shouldn’t pay them. Companies like Network for Good charge you this kind of fee. I’m not sure what exactly they’re doing for you. The technology is setup already, and they make you enter all your own information anyway information. It’s not like they’re sending someone to your office to personally evaluate your firm and match you with special programs where they actually send you donors. Maybe it has to do with their internal accounting, or maybe it’s just a random number they think you’ll pay. These fees are junk in my opinion and they’re not necessary with today’s technology. There are too many fish in the sea – move on.

Type – This is how the vendor integrates with your site. A button or button/code means that you can place an HTML button or code snippet on your website. The donor is then taken to the vendor site to complete the transaction and may or may not be able to redirect back to your site. Separate site means just that – donor clicks a link on your site and gets pushed to the vendor’s site, which may or may not even look like your site. Plugin means software that gets added to your site. This is the case with WordPress sites and means that the donation will likely take place on your site.

Ease of Use – This is on a scale of 1 to 5, with 1 meaning not user-friendly and 5 meaning very user-friendly. Keep in mind, I’m fairly tech-savvy. If I’ve rated it a 1 out of 5, and you’re not very tech savvy – that means stay away.

Notes – I put notes here where necessary. For example, detailed pricing is listed for those that require it. Also, where some don’t provide clear terms or disclosures I call that out. I also put my experience using the software there too.

 

A Full Example of an Online Donation Charge

Let’s take a full example bringing in all of the details.

Imagine we’re using PayPal, which is going to charge us 2.2% on volume and $0.30 per transaction. Over the course of the month, we have 25 transactions totaling $1,000. At the end of the month, when you get the bank statement, PayPal would have deposited a total of $970.50 into your account.  How did we calculate that?

  • Volume fee = $22.   Calculation: Total Volume of transactions X Volume fee. $1,000 x 2.2% = $22
  • Transaction fee = $7.50. Calculation: Total number of transactions X transaction fee. 25 X $0.30 = $7.50
  • Total fees = $29.50.  Calculation = $22 + $7.50 = $29.50
  • Deposit = Total Income – Total Fees = $1,000 – $29.50 = $970.50

If you look at your transaction fee as an overall percentage rate you’ll see that it added an additional 0.75% in fees overall ($7.50/$1,000) to your transactions. That would mean you paid 2.95% on your transactions on average. This is important and we’ll cover it more in a moment.

 

The Math of Online Donation Processing

Some vendors on the list charge a monthly fee for their service. Why are monthly fees so important? They instantly lower the amount of money you take home, or, effectively, they raise the percentage rate you pay. Here’s an example.

Let’s use PayPal again, but this time we’re using their pro integration which allows checkout directly on your site, not theirs. For that integration, you’ll pay $30 per month. Imagine your volume is the same every month.

Same transactions as above, but add in the additional monthly fee of $30. Our transactions over the course of the month look like this:

  • Volume fee = $22.   Calculation: Total Volume of transactions X Volume fee. $1,000 x 2.2% = $22
  • Transaction fee = $7.50. Calculation: Total number of transactions X transaction fee. 25 X $0.30 = $7.50
  • Monthly fee = $30.00
  • Total fees = $59.50.  Calculation = $22 + $7.50+ $30 = $59.50
  • Deposit = Total Income – Total Fees = $1,000 – $59.50 = $940.50

If you look at your transaction fee as an overall percentage rate you’ll see that it added an additional 0.75% in fees overall ($7.50/$1,000) to your transactions. The monthly fee has added an additional 3% to the transaction ($30/$1,000). Looking at it this way, you’ll notice your overall percentage paid on the money you took in via online donations was 5.95%, calculated by taking the overall fees of $59.50 / $1,000.

So, for the ability to take donations on your site and not use PayPal’s workflow off-site, your total fees went from 2.95% to 5.95%.

It’s also important to keep in mind that some of the platforms are really just integrations of other platforms. For example, Donate.ly actually uses Stripe. That means they’re paying Stripe’s fee so their own fee will be higher than stripe. Essentially, you’re paying for the nice user-interface that is Donate.ly’s account page. Their fee of 4.9% is almost double Stripe’s fee, and their transaction fee of $0.80 is more than double.

Other vendors don’t actually include credit card processing fees. That means, they’ll charge you extra based on how much the credit card companies charge them to run your transactions. That means the listed vendor rate of 5% could actually be as high as 10% or more when all is accounted for at the end of the month. Be careful when you look at fees. Some companies include that extra fee and some don’t. I try to call those out in the notes when possible.

 

So What Should You Do?

The question, in my opinion, is always one of fees. What will it cost me to take donations online? The question you have to ask yourself is:

Are we willing to pay that amount of money for the ability to process on our site?

Only you can answer that question.

But know this, there is no empirical research that shows just taking online donations will raise your overall donation level or annual level of giving. I have not seen one reputable survey or study that can prove that to be true, despite what any vendor claims or provides you with.

Fundraising online might make it easy for you, but it’s not going to rain dollars just by putting up a donation button. You need to make a concerted effort to use your new technology effectively and efficiently. If your current donor base is 100,000 donors and you suddenly add online donations you should see good results, but likely the increase in online donations will come at the cost of mail-in or offline donations. If your current donor base is 10 people and you add online donations you shouldn’t expect a big boon to your income.

If anything, what I have seen is that online donations can help stabilize your income. Organizations that use monthly recurring donations, like churches, can normalize their income onto regular schedules, and not be so reliant on seasonal income (like holiday giving) or event-based income that might only happen once or twice a year. Over time, that stabilization of income allows you to better plan and manage your finances and that will lead to lower costs, which will lead to more fundraising efforts, and that eventually will lead to higher fundraising dollars taken in. But don’t let anyone fool you with a document that says if you use their system your donations will increase overnight.

I equate that to the weight loss systems you see on TV. Sure, you might see the outlier who actually loses 100 pounds in 4 months, but as the incredibly small flash of disclaimer text tells you – those results are not typical and you probably wont see similar results. Unfortunately. these vendors are under no such regulations to provide such similar disclaimers. If it sounds to good to be true it probably is.

 

My Personal Recommendation for Online Donation Processing

Now, for more practical advice, I recommend using an online donation system across the board. Don’t wait, do it today. It’s there and you can start advertising it. Dont’ worry about the fee you’ll pay, Yes, some of your offline donors will become online donors, but the ease of using online donations and not having to run to the bank to cash every check that comes through the door will far outweigh the fee you pay on that money taken online.

Start small with one that doesn’t have a monthly fee.

I recommend a WordPress site with WooCommerce installed. It’s free and free. PayPal is supported out of the box.

When you get to the point where you are accepting $10,000 or more a year, you step up to something like Stripe and integrate that with WooCommerce as well. When you get above that amount, you can start wrapping in multiple gateways to get the best rates and terms.

 

The Proof is in the Pudding…

 

We don’t just spout out some random facts and figures for you here at OrgSpring. We practice what we preach, If you’d like to see how OrgSpring and a few of our clients have raised more than $500,000 completely online you can read another recent blog post called Nonprofit Websites Galore.

If you have questions or comments or need help evaluating a potential solution please feel free to leave a comment here and we’ll do our best to respond quickly. If you’d like to see how we run our own system we’d be happy to show you that too.

Good luck!

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Craig Grella

Founder and Executive Director at OrgSpring
Craig is the founder and executive director or OrgSpring, a nonprofit dedicated to helping other nonprofits achieve their missions online. Through tips and tutorials, Craig's goal is show nonprofits how to use technology to become more efficient, grow their list of supporters, and increase online donations.