Can a Church Have a Venmo Account for Donations?

Digital payment platforms have become increasingly common, with services like Venmo experiencing significant growth. As individuals embrace these convenient methods, religious organizations are exploring how to accept contributions. Churches frequently inquire about using Venmo compliantly. This article explores the practicalities and regulatory considerations for churches using Venmo for financial operations.

Venmo’s Organizational Account Requirements

Churches seeking to use Venmo for contributions should establish a dedicated charity profile rather than a personal account. Venmo offers charity profiles specifically designed for verified 501(c)(3) organizations, which typically include churches. Setting up a charity profile ensures compliance and proper financial management, also providing a verified badge that builds trust with donors.

To create a charity profile, a church generally needs verified 501(c)(3) status, its Employer Identification Number (EIN), bank account information, and details for an authorized representative. The process typically begins by creating a PayPal business account and linking it to the PayPal Giving Fund for verification. Churches should also be aware that Venmo charges a fee of 1.9% plus $0.10 per transaction for charity profiles, a common practice for digital payment processors.

Receiving and Tracking Contributions

Once a church has established its Venmo charity profile, donors can send contributions using the church’s unique handle or by scanning a QR code. Venmo’s social sharing feature allows donors to share their contributions, potentially increasing the church’s visibility. It is important for churches to note that Venmo transactions are public by default, so donors should adjust their privacy settings if they prefer their contributions to remain private.

Accurate record-keeping is important for all transactions received through Venmo, necessitating detailed records of donor names, contribution amounts, and dates of receipt. Venmo charity profiles provide access to a “donor history” and some “donation tracking” features, which can assist in this process. However, Venmo’s native reporting capabilities may not be as comprehensive as those offered by specialized church giving platforms, potentially requiring manual integration of Venmo data into the church’s existing accounting system. The church maintains responsibility for ensuring a comprehensive and accurate record of all contributions.

Tax Compliance for Digital Donations

Contributions made to a church via Venmo are generally considered tax-deductible for donors who itemize their deductions, provided the church is a qualified 501(c)(3) organization. For a donation to be tax-deductible, the Venmo account must be set up under the church’s official name and EIN, not an individual’s personal account. Using a personal account could lead to contributions being viewed as personal income, creating tax complications and invalidating the donor’s deduction.

Churches have a responsibility to provide written acknowledgments to donors for contributions of $250 or more, regardless of the payment method. This acknowledgment must include the church’s legal name, the amount of the contribution, the date(s) of the contribution, and a statement confirming that no goods or services were provided in return for the donation, beyond intangible religious benefits. These acknowledgments must be provided to donors by January 31 of the year following the donation.

Third-party payment processors, including Venmo, are required to report transactions for goods and services to the IRS on Form 1099-K when certain thresholds are met. For 2024, this threshold is $5,000, decreasing to $2,500 in 2025, and $600 in 2026 and subsequent years. While a church may receive a Form 1099-K from Venmo, this form is primarily informational for non-profit organizations, as bona fide donations are generally not considered taxable income for the church. Churches must distinguish between donations and payments for goods or services to ensure accurate tax reporting for both the organization and its donors.

Establishing Internal Financial Controls

Implementing internal financial controls is important for a church using a Venmo account for donations. Segregation of duties is a key control, ensuring that different individuals are responsible for receiving, recording, and reconciling financial transactions. This separation helps mitigate fraud and errors.

Assigning specific individuals to manage the Venmo account, perform regular reconciliations, and initiate transfers to the church’s primary bank account establishes clear accountability. Policies should be developed for accessing the Venmo account, including the use of strong passwords and multi-factor authentication, and limiting access to only authorized personnel.

Regular reconciliation of Venmo statements with the church’s internal accounting records is necessary to ensure accuracy and identify any discrepancies. Approval processes should also be in place for transferring funds from the Venmo account to the main operating bank account, ideally requiring review and authorization by more than one individual. Digital systems can support these controls by offering automated approvals, real-time transaction monitoring, and role-based access features, enhancing financial integrity.