Charitable donations come in many forms, but they all rely on the same invisible infrastructure to move money securely and quickly from donor to organisation. The global market size for non-profit organisations was valued at $289.25 billion in 2023, and it's expected to reach $394.42 billion by 2030. With such potential for growth, it's important for non-profits to use a payment processor that makes it convenient to send and receive donations.

The way you structure your organisation's payment processing can affect everything from conversion rates to reconciliation workflows, as well as how much of each donation you actually keep. Below, we'll explain how non-profit payment processing works and how to optimise it for your team, your systems and your donors.

What's in this article?

• What is non-profit payment processing and how does it work?
  
• Which online donation tools are best for non-profits?
  
• How can non-profits reduce payment processing costs?
  
• What security features should non-profits prioritise?
  

What is non-profit payment processing and how does it work?

Non-profit payment processing is the behind-the-scenes system that securely accepts, verifies and transfers digital donations to your organisation. The donations are typically made by card, bank transfer or digital wallet.

Here's how this process usually works:

• The donor clicks "donate" – or something similar – and fills out the online donation form; this includes their payment information.
  
• The payment processor checks that the card or bank information is valid and screens for fraud.
  
• If everything looks right, the processor sends the transaction forward. If there's a problem (e.g. the wrong card verification value (CVV), a flagged card), it stops and alerts the donor.
  
• Once cleared, the transaction is sent to the donor's bank or card network for authorisation.
  
• Next, the transaction is routed to the non-profit's merchant account, which acts as a temporary holding space for incoming funds.
  
• The payment, the donor's name, email and any other collected information are saved.
  
• Once processed, the donation is transferred to the non-profit's bank account, minus processing fees. This usually happens within a few business days.
  

Which online donation tools are best for non-profits?

The best donation tools reduce friction for donors, cut down on administrative work and ensure necessary data ends up in the correct place. But what's "best" depends entirely on how your organisation operates. Do you need out-of-the-box forms or custom-built workflows? Do you want a bundled fundraising suite or do you want to plug payment processing into a stack you already use?

To answer those questions, it helps to understand both sides of the donation tech stack.

Every online donation system includes:

• A front-end interface: This is the donor-facing experience – your forms, fundraising pages and mobile flows. It's what people interact with when they donate.
  
• A back-end processor: This is the infrastructure that moves the money. It authorises the transaction, verifies security, transfers funds and logs the record.
  

Some non-profits prefer a bundled solution: donation forms, customer relationship management (CRM), email marketing and analytics in one place. It's convenient and it all works together out of the box. But these platforms can come with trade-offs, such as higher fees, less flexibility and, potentially, less control over data.

Other organisations piece together their setups from different providers: Stripe for payment processing, a custom-built form or website, a CRM such as Salesforce or Bloomerang, and accounting software such as QuickBooks. If you go with this approach, it'll take more setup but it'll give you full control; plus, you'll only pay for what you use.

The choice ultimately depends on how much flexibility you need and what systems you already rely on. However, there are some important qualities in a payment processing setup that you should consider before making your decision.

Integration with your website and CRM

Look for tools that connect directly to your existing systems. Donation data should flow into your CRM or donor database without manual entry. If you use Salesforce, for instance, Stripe's integrations or partner platforms can sync donation records in real time.

Customisable, user-friendly forms

Donor experience matters. You should be able to brand the page, adjust fields and make giving an intuitive experience across devices. Forms should load fast, work cleanly on mobile and give you options to add messaging or designate funds. Stripe's hosted checkout and embeddable elements are flexible enough to work out of the box or customise deeply, as needed.

Multiple payment options

Offering more ways to pay usually means more donations completed. At a minimum, you should be able to accept all major cards and bank transfers. Ideally, you should also accept digital wallets, such as Apple Pay or Google Pay. Stripe supports all of these payment methods, with direct debits incurring lower fees than card payments.

Recurring donation support

Having good payment processing infrastructure is important for getting more recurring donations. You want a system that reliably charges donors monthly or annually, intelligently retries failed payments and gives donors control over managing their subscription. Stripe's customer portal handles this cleanly: donors can update cards, change donation amounts or pause support without contacting your team.

Transparent pricing

Watch for layered fees. Some platforms charge both processing fees and an added platform fee, while others rely on tips or monthly subscriptions. Stripe offers discounts on processing fees for non-profits.

Strong security architecture

Your tools should be PCI-compliant, encrypted and built with fraud detection in mind. Stripe includes built-in protections, such as automatic card validation, real-time fraud scoring and tokenised storage of sensitive data.

Ultimately, you want donors to be able to give easily from any device and using a wide range of payment methods. You want a setup that syncs donor and transaction data into your systems, and scales with your growth – all without creating an unmanageable amount of work for your team. Stripe works well in that role for many non-profits, especially those that want flexible infrastructure they can extend, rather than getting locked into a rigid platform.

How can non-profits reduce payment processing costs?

Every time your non-profit accepts an online donation, part of that gift goes to covering payment processing costs. The exact rates depend on the payment method and your provider, with some fundraising tools adding a separate platform fee in addition to what the payment processor charges.

This is a necessary part of digital fundraising, but there are still things you can do to reduce how much you pay in fees over time. For example, it's worth understanding which payment methods charge which fees. Certain credit card providers carry higher rates, and international cards and currency conversion can tack on more. Digital wallets, such as Apple Pay or Google Pay, typically use the underlying card's fee.

Here are some more small changes that can save money.

Use lower-cost payment methods when possible

Cards are convenient, but bank payments are cheaper – especially for large or recurring gifts. If you serve major donors or foundation partners, giving them the option to use bank transfers can substantially reduce costs.

Let donors cover the fees

Many platforms now let you add a checkbox at checkout, such as: "Add 3% to cover processing fees". A large share of donors opt in, especially when it's framed as a way to ensure 100% of their intended gift goes to the cause. Over time, this can help you recover thousands of dollars in net revenue. If your platform doesn't support this option, you can still offer a suggested increase manually.

Avoid unnecessary platform fees

While payment processors charge per transaction, some donation platforms charge additional fees, too. If your team can handle donation pages and CRM workflows, or if you want more control over the experience, you might not need to pay for bundled services. Using Stripe directly, for example, means you're only paying the non-profit processing rate, with no extra fees on top.

Negotiate or apply for non-profit rates

Check if your processor offers special non-profit pricing. It might even be possible to negotiate custom pricing if you operate a high-volume organisation, especially if you're primarily processing debit cards or large gifts through bank transfers.

Optimise your tech stack to prevent hidden costs

Some processors or platforms charge extras, such as setup fees, monthly fees, PCI compliance fees or account maintenance fees. These can quietly drain your budget. Stripe has no setup or hidden monthly fees. You only pay per transaction.

Cover fees with outside funding

Some non-profits approach sponsors or major donors with a specific request: help us cover payment processing costs for this campaign. Others treat processing fees as part of the fundraising budget and allocate accordingly. While this won't reduce costs on a per-transaction basis, it can help offset them at the organisational level.

What security features should non-profits prioritise?

When donors give online, they're trusting your non-profit with sensitive financial information. That makes security a core part of maintaining credibility and continuing to fundraise. If donor data is compromised through a breach, phishing attack or technical oversight, you're risking fines, account suspension, reputational damage and revenue loss. Even a small security incident can raise red flags with board members, regulators and supporters.

A secure payment setup should include:

• Hosted donation forms that keep card data off your servers
  
• PCI Level 1 certified processors
  
• Built-in fraud detection and real-time risk screening
  
• Transparent reporting and logs
  
• Minimal manual handling of donor data
  
• Support for compliance documentation and audit preparation
  

Here are the main security measures that non-profits should prioritise.

Use a PCI Level 1 provider

The Payment Card Industry Data Security Standard (PCI DSS) is a set of rules created by major credit card companies to keep card data safe. If your organisation handles card donations, you're expected to comply, whether you're using a checkout page, an embeddable form or other means of collection. Using a PCI Level 1 provider, such as Stripe, can simplify this process.

Encrypt and tokenise card data

Encryption scrambles sensitive data in transit. Tokenisation replaces card numbers with unique tokens, so even if your systems are compromised, no usable card data is exposed. Stripe handles both by default.

Activate fraud protection tools

Non-profits can be targets for card testing attacks, where fraudulent actors use donation forms to verify stolen cards. Your payment platform should support address verification service (AVS) and CVV checks at a minimum. Advanced systems, such as Stripe Radar, use AI to detect and block suspicious activity in real time.

Lock down staff access and data practices

Security also includes your internal policies. Make sure only the right people have access to donor payment data. Use two-factor authentication (2FA). Avoid emailing sensitive information. Train your staff on basic data security protocols.

Display visible trust signals

Use trust signals to make donors feel confident about sharing their information. Make sure your website's address includes Hypertext Transfer Protocol Secure (HTTPS) so they know their data will be protected. Display security messaging or trust badges on your donation page, as well.

Follow global data rules when applicable

If you're accepting donations from multiple countries, you'll need to comply with local data privacy regulations that govern how personal data (e.g. names, emails) is collected, stored and shared. Make sure your platform supports data export and erasure requests, and that your privacy policy reflects these obligations.