Can a Nonprofit Use Venmo? What You Need to Know

Digital payment platforms have become increasingly important for organizations seeking to connect with supporters and facilitate contributions. As more individuals rely on mobile applications for financial transactions, the ability to accept donations through widely used services like Venmo presents a significant opportunity for nonprofits. Incorporating such platforms can streamline the giving process, making it more convenient for donors to support causes they care about. This integrates technology into fundraising efforts, allowing nonprofits to broaden their reach and engage with a tech-savvy audience. Utilizing familiar payment methods can also boost donor confidence, encouraging greater participation in fundraising initiatives.

Setting Up a Venmo Business Profile

Establishing a Venmo presence for a nonprofit begins with creating a Venmo Charity Profile, which is distinct from a personal or general business profile. Organizations must first have an existing PayPal for Nonprofits business account, as Venmo is a PayPal company. This step involves setting up the PayPal business account and designating it as a nonprofit, requiring details such as the organization’s Employer Identification Number (EIN), website URL, and bank account information.

Once the PayPal nonprofit business account is active, log into PayPal and navigate to its Business Tools section to find the Venmo charity profiles application. From there, organizations can either create a new Venmo account or link an existing one. Note that a pre-existing personal or general business Venmo profile cannot be converted into a charity profile; a new profile with a unique phone number and email may be necessary.

Building the charity profile involves inputting organizational details. This includes the nonprofit’s name, a descriptive overview of its mission, and relevant keywords for discoverability within the Venmo app. Contact information and the organization’s website URL are required fields. A short, memorable username is beneficial for donors searching for the profile, and organizations can upload photos to visually represent their work.

After information is provided, organizations should preview their profile to ensure accuracy and alignment with their branding. Once satisfied, the profile can be published, making it visible to Venmo users. This setup process enables the nonprofit to begin accepting digital contributions through the platform.

Handling Donations and Payments

Once a Venmo Charity Profile is established, nonprofits can begin receiving donations through various methods. Donors can send contributions by searching for the nonprofit’s Venmo username within the app. Organizations can also provide a unique QR code linked to their charity profile, which donors can scan to pay. This QR code can be displayed digitally or printed for in-person events and marketing materials.

Venmo also supports payment links, shareable URLs that direct donors to the nonprofit’s profile with the payment field ready. This streamlines the giving process, eliminating manual entry of user details and reducing errors. Another option is “Tap to Pay,” allowing for contactless payments at events where donors can simply tap their phone to donate.

Each donation received, Venmo applies a transaction fee. Nonprofits incur a fee of 1.9% plus $0.10 per transaction. This fee is deducted before the funds are credited to the nonprofit’s Venmo balance. Understanding this fee structure is important for financial planning and determining the net amount received from each contribution.

Funds in the Venmo balance can be transferred to the nonprofit’s linked bank account. Standard transfers take one to three business days and are free. For immediate access, an instant transfer option is available, incurring a fee of 1.75% (minimum $0.25, maximum $25). Nonprofits should manage these transfers based on their cash flow needs and consider the associated costs.

Financial Tracking and Compliance

Effective financial tracking is important for nonprofits utilizing Venmo to ensure transparency and accountability. Venmo provides donation history and account statements, useful for internal accounting. Nonprofits should regularly review these statements to categorize incoming funds accurately and integrate them into their financial records.

Reconciling Venmo transactions with bank statements and internal ledgers is an important step to verify that received funds are accounted for and fees applied. This involves comparing Venmo data with bank deposits and the nonprofit’s accounting software. Manual reconciliation can be time-consuming and prone to errors, requiring a systematic approach.

Donor acknowledgment and tax receipt issuance are compliance requirements. For contributions of $250 or more, the Internal Revenue Service (IRS) requires a written acknowledgment from the charitable organization for the donor to claim a tax deduction. This acknowledgment must state the donation amount, date, and whether any goods or services were provided in return.

Venmo automatically sends a donation receipt to the donor’s email address for each contribution. However, these automated receipts may not always contain all details required by the IRS for substantiation, especially for quid pro quo contributions. Nonprofits should supplement Venmo’s automated receipts with their own record-keeping to meet IRS guidelines, including a written disclosure for quid pro quo contributions over $75.

Data security and donor privacy considerations are important. Nonprofits handle sensitive donor information, and while Venmo employs security measures, organizations should maintain robust internal practices for managing donor data. This includes understanding Venmo’s data sharing policies and protecting against privacy concerns, given Venmo’s social features where transaction details can be public.