Is Venmo Free for Nonprofits? What to Know About Fees

Venmo is a widely used digital payment platform known for peer-to-peer transactions. Its ease of use and broad adoption make it appealing for individuals and organizations to send or receive money. Many nonprofits consider Venmo to collect funds, leveraging its familiarity and convenience for donors. This approach can streamline the donation process for a tech-savvy audience.

Venmo Fee Structure for Nonprofits

Venmo charges fees for transactions processed through a business profile, which nonprofits must establish to accept donations. For payments received for goods and services, including donations to a business profile, Venmo applies a fee of 1.9% plus $0.10 per transaction. This means that for every donation processed, a small portion of the contribution will be deducted by Venmo.

These fees are standard for all business transactions, and Venmo does not offer reduced rates or fee waivers for nonprofit organizations. While personal payments between individuals, funded by a linked bank account or Venmo balance, incur no fees, this does not apply when a nonprofit uses a business profile. Nonprofits should factor these transaction costs into their fundraising strategies and budgeting.

Transferring funds from a Venmo balance to a linked bank account also has fee implications based on transfer speed. Standard transfers, which take one to three business days, are free of charge. However, opting for an instant transfer for quicker access incurs a separate fee: 1.75% of the transferred amount, with a minimum of $0.25 and a maximum of $25.

Setting Up a Nonprofit Venmo Account

Nonprofits accepting donations via Venmo should create a business profile rather than a personal account. This distinction is important for financial management and compliance. The process requires providing organizational details and documentation for verification.

Organizations must supply their Employer Identification Number (EIN), legal business name, and physical address. Proof of nonprofit status, such as a 501(c)(3) determination letter issued by the IRS, is required for business profile verification. Linking a verified bank account is necessary, as this will be the destination for transferring collected funds.

Creating a business profile is initiated through the Venmo application or website, to input information and upload documents. Providing accurate and complete information facilitates approval, allowing the nonprofit to begin accepting donations. This preparatory phase ensures the account is properly configured for organizational use.

Receiving Payments and Donations

Once a nonprofit’s Venmo business profile is active, donors can send contributions. Donors have several methods to make payments, including searching for the nonprofit’s unique Venmo username, scanning a QR code, or clicking a direct payment link. These options offer flexibility and convenience for supporters.

Payments received through the business profile are automatically deposited into the nonprofit’s Venmo balance. The organization can monitor incoming transactions directly within the Venmo application, which maintains a record of all donations. This provides a clear overview of contributions as they come in.

Funds held in the Venmo balance can be transferred to the nonprofit’s linked bank account. Organizations can choose between a standard transfer or an instant transfer. Regularly reconciling these incoming Venmo transactions with the nonprofit’s internal accounting system is important for maintaining accurate financial records.

Important Operational Considerations

Nonprofits utilizing Venmo for donations must consider their obligations regarding IRS reporting and donor acknowledgment. While contributions to a nonprofit are tax-exempt for the organization, specific rules apply to donors seeking tax deductions. Nonprofits are required to provide a written acknowledgment for individual contributions of $250 or more for the donor to claim a tax deduction.

Venmo transaction details may not always provide comprehensive donor information necessary for IRS compliance or personalized stewardship. Organizations should implement robust internal record-keeping systems to capture complete donor data, including names, addresses, and specific donation amounts. This often involves cross-referencing Venmo data with other donor management systems to ensure all required information is collected and maintained.

Donor privacy is another consideration when using Venmo. The platform allows users to set transaction privacy as public, visible to friends, or private. To respect donor anonymity, nonprofits should encourage donors to set their donation transactions to private, unless explicitly chosen otherwise. This helps manage the visibility of financial contributions in accordance with donor preferences.