Fundraising & Development

Venmo for Nonprofits: A digital fundraising secret or potential trap?

January 3, 2022 Nonprofits Decoded Team
Venmo for Nonprofits, an overview

As a nonprofit, you’re always looking for new donation opportunities and even new donation tools as part of your digital strategy.

Over the last decade, we’ve seen the rise of e-wallet services like PayPal, and more recently, Venmo. According to research, more than a third of all donations received by nonprofits come through digital payments, with peer-to-peer platforms and even cryptocurrency donations to nonprofits on the rise.

With the rapid adoption of these payment methods, experts project online donations to nonprofit organizations will increase more than tenfold in the year ahead.

Mobile payment services like Venmo allow for convenient donations without the need for the donor to open their wallet and type in their credit card information, serving as a peer-to-peer online payment service. Venmo gives your donors a peer-to-peer fundraising option with seamless integration to your bank account. There’s no need to enter any credit card details into a payment portal using these systems and the process is fairly seamless for a donor.

Adding Venmo to your donation methods gives your nonprofit the chance to receive the funding your nonprofit so desperately needs. This post unpacks everything you need to know about integrating Venmo payments into your donation strategy.

What is Venmo?

PayPal, one of the leaders in peer-to-peer payment services, acquired Venmo from Braintree in 2013. Venmo is a convenient addition to your payment methods, allowing account holders to make fast, accessible transfers to friends, family, retailers – and nonprofits.

The Venmo app links to your bank account, credit, or debit card, drawing funds directly from your accounts instead of through a separate account with another provider, like PayPal. Venmo users can send payments to any other Venmo user in their network with a tap of a button in the app.

Venmo is similar to Cash App, from Square, and Zelle, which is supported by many banks as a new mobile payment app.

Venmo funds can be cashed out directly into your bank account as you receive them, with seamless, user-friendly integration. Users can also leave funds in their Venmo account and use them to pay for goods and services with participating retailers.

Is Venmo a good option for nonprofits?

Venmo is popular with Millennials and Gen Z’s, with its user base being people under 50 years of age. Research shows that the biggest demographic for Venmo is in the 25 to 34-year age bracket, representing over 50% of all users.

Therefore, nonprofits looking to launch fundraising drives targeting Millennial and Gen Z markets need to add Venmo to their payment methods if they want the best chance of capitalizing on donations from this new generation of up-and-coming patrons.

With that said… there is one important note for nonprofits.

Venmo is not formally configured for nonprofits, so many normal donation and fundraising platform features simply do not exist. For example, it does not generate tax-compliant receipts for donations and does not integrate with donor CRMs.

This basically means you’ll just need to ensure your organization is properly documenting donors through a standard process to allow for thank you and follow-ups.

Small-dollar fundraisings and informal fundraisers have become popular on Venmo, replacing “door to door” fundraising for school clubs and small groups.

How can Venmo donations benefit nonprofits?

Venmo gives nonprofits an easy and convenient way to accept payments compared to conventional methods like bank transfers and credit card options. With traditional methods, you might have to wait a few days for the funds to reflect in your nominated bank account.

That small delay can affect your cash flow for your operations. However, with Venmo, you get the payment reflected in your bank account in a few hours. Donations into the Venmo account are available for spending almost instantly after the sender processes the payment.

Venmo’s platform also lets nonprofits build social proof for their digital fundraising campaigns, similar to blockchain technology.

Venmo includes a social feed displaying all your donations and comments from your donors. By enabling this feature, you can create momentum in the market when other prospective donors see other people donating to your cause.

How can nonprofits start using Venmo to accept donations?

Venmo announced a beta test module for registering nonprofits for donations. However, the process is still under administration and not available to the general public or nonprofits that didn’t register for the beta program (that’s now closed off to applications).

Venmo has no current guidance on whether it intends to activate this functionality into its platform in the future.

So, does this mean that nonprofits can’t use Venmo to accept donations? Fortunately, there are third-party apps that allow nonprofits to utilize Venmo to receive donations.

How do nonprofits get donors to use Venmo?

So, now that you know the benefits of adding Venmo to your nonprofit’s payment options, how do you implement it and drive donations through this service?

Create a Donor Tutorial

The best place to start is a tutorial explaining how your donors can process their donations using the Venmo app. Create an onboarding video explaining a step-by-step process for using the app to make their donation to your cause.

In the video, you can explain why your organization accepts Venmo and how users can use the platform to donate. Include best practices for helping you track your donations.

Mention Your Venmo Address

Include your Venmo address with every fundraising message you send out to your donor base and prospects.

Whether posting on social media or sending an email, be sure to give your Venmo handle a visible position where donors can see it.

Create Healthy Competition

Create competitive fundraising campaigns where you create teams using hashtags to lead your crowdfunding campaign. Allocate a unique hashtag to each team, and spur competition with incentives.

The incentive for attracting the most donations could be social media shoutouts, gift cards, or matched donations. Since Venmo is a social platform, these fundraising strategies allow you to create momentum with your campaigns, improving participation rates and results.

Start Small

Venmo is the ideal platform for capturing donations under $300. Grow your donor database by asking for small donations. And remember, Venmo doesn’t support common fundraising features like recurring donations.

Focus on more donations rather than higher donation amounts, and you’ll get more traction with Millennial and Gen Z demographics.

Using a third-party app to enhance Venmo donations

Givebutter is the only fundraising and donation platform offering Venmo as a payment method to donors, and it’s free for nonprofits to use. You get a streamlined process, enabling your donors to send you donations to Venmo using Givebutter campaigns.

All Givebutter fundraising campaigns for nonprofits come with a Venmo payment option built into the interface. There’s no complicated setup, and you can start receiving donations right away.

With GiveButter, organizations don’t need a nonprofit Venmo account to start accepting donations.

All Venmo donations pool together with payment types from credit cards, Apple Pay, PayPal, and more, providing your organization with fast payouts. With Givebutter, you get a no-fee fundraising platform, helping you circumvent charges imposed by other payment methods, giving your organization to complete donation amount.

Givebutter covers the 2.9% + $0.30 transaction fee charged by Venmo. Givebutter will also send your donors their tax receipt automatically, with no input required from your side.

You also have the option of setting up a thank you page for all your donors. This simple tactic helps you create a sense of satisfaction in the donor after making their payment, increasing the chance that they’ll send you recurring payments.

Future proof fundraising

As we move deeper into the digital era, smartphones are gaining more functionality for everything we do in life, whether making a payment for a cup of coffee or a donation to your nonprofit. Smartphones changed communications forever, allowing for automated, convenient apps to take care of many of our responsibilities.

Now, people can order food, rides, convenience items, and anything they like through their smart devices. By integrating your site for Venmo payments, you keep up with the changing marketplace dynamics, ensuring your organization survives and thrives in the digital age.

Move into the new age of digital donations with Venmo for nonprofits

With the payments industry experiencing huge rates of change in the last decade, nonprofit organizations need to embrace technology to help them achieve success with their campaigns.

Venmo offers your organization a convenient payment tool to add to your nonprofit, giving you the opportunity to broaden your reach in your donor demographic.

Of course, if you’re not ready for Venmo or mobile app donations, there are plenty of great payment processors available to nonprofits. Consider these secure payment options for your next fundraising effort, many of which can be easily integrated into your nonprofit website for seamless credit card payments.