Charity payment processing makes it possible for nonprofit organizations to accept donations. It converts someone’s desire to help into measurable impact. But it works only if the payment experience is fast, safe, and convenient. Getting it right matters, with charitable giving in the US amounting to $592.50 billion in 2024.

Below is a practical guide to building a payment experience that works for your donors and your organization’s mission.

What’s in this article?

• What is charity payment processing?
  
• How is charity payment processing different from other types of payment processing?
  
• What payment methods can nonprofits use to accept donations?
  
• How do you improve the donation experience?
  
• How to set up recurring donations
  

What is charity payment processing?

Charity payment processing is how donations move from a donor’s bank account to your nonprofit’s. It includes the technology and systems that safely capture the payment information, transfer the funds, and confirm the transaction.

When someone gives money online, whether it’s $5 or $5,000, their payment details are encrypted and passed through a gateway that runs fraud checks. A processor then routes the funds through the banking system and deposits them into your nonprofit’s account. That process usually takes just a few seconds to start, although the money itself might settle in your account within a few days, depending on the method.

If your donation form is clunky, confusing, or feels even slightly unsafe, that gift might never come through. But an easy donation experience—including a solid layout, fast loading, and multiple payment methods—can increase completion rates and donation amounts.

What makes charity payment processing different from a typical business transaction is the context. There’s no product, cart, or shipping address. The entire experience needs to feel fast, safe, and meaningful, rather than transactional. When done well, charity payment processing works reliably in the background while prioritizing the donor experience. It needs to support one-time gifts, recurring donations, mobile payments, event contributions, and any other way someone might want to support your mission.

How is charity payment processing different from other types of payment processing?

On the surface, accepting a donation looks a lot like accepting a payment in any other industry: card data or bank details are collected, funds are transferred, and a receipt is sent. But in practice, charity payment processing follows a different set of priorities. Here are the differences.

Nonprofits can qualify for lower rates

Charitable organizations are eligible for reduced payment processing costs through special nonprofit interchange rates. Card networks such as Visa and Mastercard offer these rates, which are tied to specific merchant category codes (MCCs)—usually MCC 8398.

However, you get these rates only if your processor recognizes and applies your nonprofit status correctly. If you use a payment provider such as Stripe, you can access discounted pricing by submitting your Employer Identification Number (EIN) or a letter from the Internal Revenue Service (IRS) that designates your 501(c)(3) status. Not every processor passes these savings along automatically. And some fundraising platforms might batch your donations under their own MCCs, in which case you might miss out entirely. It’s worth confirming whether your processing setup reflects your nonprofit status in the way networks and banks recognize.

The economic considerations are different

Payment processing fees are part of the cost of owning a business. But for a nonprofit, that’s money that could go straight to the mission. That’s why charities tend to be more proactive about minimizing processing costs. They encourage bank transfers over credit cards for large gifts; they accept donations through software without platform fees; or they give donors the option to cover fees themselves. This cost sensitivity is structural as well as philosophical.

Donation flows are more fragile

In ecommerce, customers expect a longer checkout with a cart and maybe some upsells, shipping options, and discount codes. They’ll stick around because they want what they’re buying.

A donor isn’t transacting for a product. They’re giving because they want to help, and the impulse to give is often fleeting. A long form, unclear payment options, or even a weird-looking confirmation screen can be enough to derail a donation. Charity payment processing prioritizes immediacy, clarity, and reassurance. Donation forms are built to capture intent before it fades.

The user interface (UI) and flow decisions that work for retail generally don’t translate to donations. You need to finalize transactions faster, without losing customer confidence along the way.

Recurring giving is a revenue model

Recurring donations account for most of the budget for many nonprofits. A healthy monthly donor base brings predictable cash flow and lowers a charity’s reliance on seasonal campaigns or events.

In this context, payment processing directly shapes donor retention and lifetime value. Your setup might need to support:

• Smart retry logic for failed charges

• Automatic handling of expired or updated cards

• Safe storage of payment methods

• Easy access for donors to manage their own plans—without contacting support

Receipts and records are part of the donor relationship

Unlike a typical online sale, a donation is often the beginning of a long-term relationship—one with financial, legal, and emotional components. That means your payment processor needs to integrate cleanly with your customer relationship management (CRM) system, send proper receipts, and ideally support end-of-year giving summaries.

Receipts might be a tax formality, but they’re also a communication touchpoint. So are payment confirmation pages, emails sent after donations, and anything that helps the donor feel confident, seen, and appreciated.

Some nonprofits also rely on payment data to power automation (e.g., follow-up messages, campaign segmentation, recurring upgrade offers). If donation data doesn’t flow well into those systems, it’s harder to build customer confidence at scale.

Nonprofits need simpler tools

A lean team with limited tech resources still needs to handle donor payments well. Nonprofits typically choose aggregators or third-party donation platforms to avoid the overhead of setting up merchant accounts.

If you go this route, the trade-off is that you have less control over branding, reporting, and sometimes how the donation shows up on a donor’s bank statement. If the descriptor on the card statement says “XYZ Giving Platform” instead of your nonprofit’s name, you might get more chargebacks or confused donor inquiries.

As organizations grow, many shift to using dedicated payment processors that provide more direct control and better integration options. But early on, they often prioritize ease of setup and reliability.

What payment methods can nonprofits use to accept donations?

The more flexible your payment options are, the fewer barriers there will be to giving. Here are the methods nonprofits typically use and why each one matters.

Credit and debit cards

Cards are still common donation methods, because many people already know how to give with them and they work across devices, forms, and platforms. Nonprofits can also usually qualify for reduced card processing fees. Major networks (i.e., Visa, Mastercard, American Express, and Discover) are all worth accepting, although American Express comes with higher fees and might not be suitable for every organization.

Bank transfers

Bank transfers let donors give straight from their bank accounts. They’re especially useful if you’re working with high-value donors who don’t want to give via card. It takes a little more effort on their end (e.g., entering routing and account numbers, or logging in) so onboarding flows need to be smooth to avoid drop-off. But the upside is substantial: bank transfers have lower fees than card payments, which makes them ideal for larger donations or recurring gifts, where that fee gap compounds over time.

Digital wallets

Giving via mobile needs to be fast. Digital wallets make it almost instant. If a donor has already saved their card to their device, they can give with a tap. This means:

• Fewer abandoned donations, particularly on mobile

• Higher conversion rates, especially among younger donors

• Built-in security and biometric authentication

Cash and checks

These are still common donation methods, particularly for in-person events or older donor demographics. They have no processing fees, but the overhead is high—you’ll need to manually track, deposit, and reconcile donations. Cash and checks are also harder to attribute to campaigns or donor profiles unless you have a tight offline tracking process.

These methods aren’t going away anytime soon, but many organizations are trying to gently shift donors toward digital options for ease, speed, and consistency.

Peer-to-peer apps

Apps such as Cash App and WeChat Pay are widely used to send payments, especially in younger circles and grassroots campaigns. These can be helpful as supplemental channels but shouldn’t replace a full-featured donation platform. Peer-to-peer apps are easier to promote through QR codes, live events, or social sharing, and they reduce friction for donors who already use them daily. However, they can have limited branding and visibility, and reconciliation takes effort.

Cryptocurrency

Crypto remains a niche form of payment, but it works in certain scenarios, particularly for donor bases that are younger or more tech-savvy. This option usually involves third-party software to convert crypto to cash and works for occasional large gifts, but it’s less useful for recurring or mass-market giving.

Stocks and donor-advised funds (DAFs)

These options are not payment processing in the traditional sense, but they’re increasingly popular for major donors. You won’t see them used every day, but when you do, the impact is meaningful. Stock gifts often have notable tax benefits, and DAFs are another way to give large, planned gifts. You typically process them through brokerages or DAF platforms, and not your main processor.

How do you improve the donation experience?

Donating is optional, so it’s important to improve the donation experience to remove friction and make the act feel simple and meaningful. If the process feels clunky, confusing, or untrustworthy, people might not follow through. Here’s how to refine your donation experience.

Keep the form short

Ask for only what you need, including a name, donation amount, payment information, and email address. Long forms, especially on mobile, can cost you donors. If you can skip collecting mailing addresses or phone numbers, do so. If you need that information later, you can follow up.

Suggest donation amounts

Don’t make donors guess what’s typical or impactful. Suggest amounts (e.g., $50, $100, $250) and let them pick; people frequently choose a middle option. You can anchor those amounts to real impact (e.g., “$100 = school supplies for a classroom”), but always include an “Other” field for flexibility.

Design for mobile first

Assume your donors are on their phones. The form needs to load fast, look good on small screens, and work without the need to zoom or side-scroll.

Make the form feel secure

Donors need to know their payments are safe and their gifts are going where they intend. Here are some ways to subtly reassure them:

• Display a security badge or “secure payment” message.

• Include your logo and consistent branding across pages.

• Mention where their money goes (e.g., “100% of your donation supports clean water projects”).

Confirm the donation

Once someone makes a donation, send a confirmation right away. Include a thank-you message that acknowledges the gift as well as details of the transaction (e.g., gift amount, payment method, recurring vs. one-time donation), and any next steps. You should also email a receipt, using messaging that is personal and appreciative.

Test, measure, and adjust

What works for one organization might not for another. Use analytics to see where donors drop off. Conduct A/B tests on headlines, button text, or form length. Review the data and then use it to refine your tactics:

• Does a $50 default donation get more traction than a $25 one?

• Do more people give if you mention impact?

• Are mobile users abandoning the form partway through?

How to set up recurring donations

Recurring donations are the most stable and flexible source of funding for many nonprofits. They turn a one-time impulse into ongoing support and often lead to higher total contributions over time. But building a recurring program that works—for both you and your donors—requires more than just a checkbox on your form.

Here’s how to set it up well, from the technology to the donor experience.

Choose tools that handle recurring billing

Your payment system needs to support recurring charges safely, automatically, and reliably. Look for features such as:

• Tokenization

• Automatic billing at fixed intervals (e.g., monthly, annually)

• Smart retries on failed payments

• Automatic handling of expired cards

• Donor self-service (e.g., to pause, update, or cancel their plans)

Make the option obvious

Ensure the recurring payment option is visible:

• Have “Give monthly” as a default option next to “Give once.”

• Explain the impact of recurring support (e.g., “Your monthly gift helps us plan ahead”).

• Use framing that makes smaller monthly gifts feel more doable (e.g., “Just $15 per month feeds a family”).

Simplify the sign-up flow

Once someone selects a recurring gift, the form needs to feel just like a one-time donation by asking for an amount, payment method, and email. Then, confirm the frequency, amount, and payment method. Note that saying something specific such as, “You’re giving $50 per month,” is better than just saying, “Submit.”

Some organizations ask donors to create an account. But unless there’s a strong reason to, keep this optional. Many platforms let donors manage their gifts later via a secure link without requiring a password at sign-up.

Automate what happens behind the scenes

Recurring gifts shouldn’t create monthly work for your team. Once they’re set up, your system needs to handle charges on schedule, send receipts, retry failed payments, and send notifications.

Let donors manage their gifts on their terms

Donors should be able to adjust, pause, or cancel their recurring donations without issue. They also need to be able to reach a support team easily if they need help.

Treat recurring donors like VIPs

A recurring donation is a relationship. Repeat donors often become your most loyal advocates. Once someone commits, follow up by:

• Sending a welcome email or letter

• Giving updates on the impact of recurring support

• Marking anniversaries or milestones

• Offering occasional perks (e.g., early updates, small gifts, exclusive content)

Politely ask for upgrades

After a donor’s given for a while (e.g., a year), consider asking whether they’d like to increase their gift. Make the message personal, talk about the impact, and don’t apply too much pressure. For example, you could say, “You’ve helped fund meals for 12 families this year. Would you consider increasing your monthly gift from $25 to $30 to reach even more?”

Track performance and adjust

Recurring giving requires monitoring. Use data to tweak your messaging, timing, and management. The goal is to increase sign-ups and keep donors engaged longer. Track:

• Churn (i.e., how many people cancel or lapse)

• Lifetime value (i.e., how much recurring donors give before they stop)

• Average gift size and upgrade rates

• Drop-off points in the sign-up flow