Square for Nonprofits: Fees, Donation Setup, and When to Use PayBee

Square for nonprofits could be a wonderful tool for organizations that need to accept donations both online, and in person, but whether it’s the ideal fit for you depends on a few things. Your payment methods, the total costs of running the software, and the fundraising workflow support you need beyond just collecting a payment might all come into play.

If you’re selling something to raise funds, like custom t-shirts, or collecting contributions through a QR code, for instance, Square is fine, and it can even handle recurring gifts. For more complicated events though, like  charity gala, you might have more to think about. 

Here’s what charitable organizations should probably know before choosing Square for US accounts, and comparing it with options like PayBee. 

Is Square a Good Choice for Nonprofit Donations and Payments?

It absolutely can be if you’re dealing with straightforward donation collections, merchandise sales, or in-person payments. It’s great if, for instance, you’re an arts charity selling prints at a benefit exhibition, or a food bank trying to collect contactless donations. 

Square’s secure, reliable, and flexible enough to support different payment types, and most nonprofits don’t need to combine it with expensive hardware. 

You can even sell basic event tickets, and Square’s nonprofit payment processing tools also include a Customer Directory, so you can collect purchase histories, contact details, and reporting insights. Just keep in mind that Square does sometimes mask email addresses, so you may still need donors to provide information directly if they want you to stay in touch.

The whole package is pretty respectable for a simple fundraising event, though you may start looking more at more specific event software if you’re also going to be handling things like auction bids, table assignments, or pledges that need to come with better tracking.

What Are Square's Fees for Nonprofits?

Square doesn’t currently offer custom pricing or special rates for nonprofits, and the fees you’re charged depend on both your account plan and the payment method used. Although you can use Square’s software for free without a monthly subscription, you’ll still need to account for payment-processing fees, and those are higher than they would be on the paid plans.

These are the current Square nonprofit fees listed for US users on the free plan:

If you can afford to upgrade, the paid plans look like this:

• Square Plus: $49 per month (in-person processing 2.5% plus $0.15)
• Square Premium: $149 per month (in-person processing 2.4% plus $0.15)

So, for a $100 in-person donation, Square Plus would leave you with $97.35, and Square Premium would leave you with $97.45. 

It’s also worth saying that there are various other things that can change the cost aside from your chosen plan and the payment method you’re accepting. Online integrations have a cost, for instance. The Free Online API rate is 2.9% plus $0.30; not every WordPress integration or donation form will necessarily use the same Payment Links rate.

Also, although you can accept Square payments with a phone, depending on your event or fundraising activities, you might decide to pay for extra hardware, which comes with it’s own costs. International cards and optional extra software for things like accounting can increase the overall cost too.

If you start raising a lot of money, (over $250,000 a year) Square might invite you to discuss custom pricing options. 

How to Set Up a Square Account for a Nonprofit

The process of setting up a nonprofit Square account is pretty similar to setting up any kind of account with Square, and it doesn’t generally take very long. 

The most important thing you can do is get your information ready, remembering that Square will need to identify there’s a real person responsible for the account, even if it belongs to your established charity overall. To get started:

1. Pull together all of your nonprofit’s information, including the registered name, banking details, address, and Employer Identification Number (EIN).
2. Choose the right business structure from the list, based on what your legal registration says, that should be “Nonprofit organization”.
3. Enter your EIN details, and go through the step-by-step verification process.
4. Connect the bank account you’ll be using for donations and purchases. Though an instant bank link is supported (through Plaid), it can take four working days for verification to go through, so give yourself plenty of time.
5. Organize your payment settings and create separate categories for things like tickets, merchandise, and donations. Also set up any required team member accounts.
6. Test the system with a transaction, check where the payment appears in your reports, what’s on the receipt, and whether the bank connection works.

Do make sure you keep your account information current once you’re set up too, since Square can request fresh details from you at any time, even if nothing changes. 

How to Accept Square Donations Online, Through QR Codes, and on Your Website

A Square donation link or payment link lets you accept donations without having to buy a card reader, and you can even create different links or QR codes for each appeal or fundraiser.

Getting a donate button setup is usually pretty simple.

• Visit your Square Dashboard and click on the Payment & Orders tab, followed by Payment Links, and Create Link.
• Choose the option to ‘Accept a donation’ and enter your appeal’s name, a small description, and pick between one-time or recurring donations.
• Add an image, donation goal, or deadline to your campaign (if necessary). You can also add up to two custom fields to collect donor information.
• Save your link, then share it through social media, email, or add the QR code to any printed materials you’re using.

If you’re adding a Square donation button straight to your website, you’ll need an integration. The WordPress integration can send your supporters directly to Square’s hosted checkout, but if you want the payment form on your website, there’s a Square add-on available from Gravity Forms. That add-on also supports recurring donations, but you do need a Pro, Elite, or nonprofit license. 

Keep in mind that there is a $5,000 donation limit for this particular kind of payment link. Another thing to keep in mind is that Square can show new visitors donations counted towards a fundraising goal when you set one, which is great if you want to show progress as it’s happening.

Are Square Payment Receipts Enough for Charitable Donation Acknowledgments?

Not entirely; although Square does let users customize payment receipts with your charity’s logo, contact details, and a message to supporters, that doesn’t make it a complete charitable acknowledgement. 

The IRS guidelines require donors claiming for individual contributions worth $250 or more to get a written acknowledgement that names the charity, the contribution amount, and any details on anything that supporter might have gotten in return. 

For example, if a supporter buys a $250 ticket to a gala, which includes a dinner and drinks worth $75, the potential deductible amount (assuming the IRS standards are met), is $175. There’s also a separate disclosure required for payments over $75 when donors receive something like dinner in return, so it’s worth being cautious. 

Auction purchases can be complicated too, because the fair market value of the item changes what a buyer might be able to claim. It might be a good idea to share as much information as possible on your website about what the donation receipt will include at the start of a campaign. 

How to Prepare Square Payments for a Nonprofit Fundraising Event

Square is designed to be a simple solution for accepting payments, but even the simplest software needs testing. Run the test with the volunteers and equipment you’re going to have at the event. 

The checklist to work through:

• Accepting payments: Scan a printed QR code, check the campaign name is right, then take a small card payment and look at what shows on the receipt. Make sure you’re collecting the contact details you need (with consent), and that everything processes correctly.
• Permissions: Decide which volunteers should have permission to access specific Square features, and enable two-step verification. You’ll probably need at least one person with authority to issue refunds, and everyone that takes payments should know what to do if a card is declined.
• Check offline rules: Tap to pay on Android and iPhone devices won’t accept offline payments, and Square hardware has limits too, including a 24-hour acceptance window for certain readers, and a 72-hour upload deadline. Be careful not to sign out or reset a device that’s holding any pending payments.
• Account management and reconciliation: Give someone access to the accounts and ask them to compare gross donations, refunds, fees, and deposits afterward, keeping merchandise and ticket sales separate from gifts.

After you’ve run through all the tests, invite your volunteers to ask questions regarding anything they’re still uncertain about before the event.

How Schools, Churches, Healthcare Foundations, Arts Groups, and Community Nonprofits Can Evaluate Square

As we said, Square can be a good choice for nonprofits, but how helpful it really is depends a lot on what fundraising actually looks like for your organization. Here’s a quick look at what different types of groups should probably be thinking about.

Schools and PTOs

If you’re planning on selling spirit-wear at a school fair or athletic fundraiser, or you’re planning to collect donations from community supporters, Square should be absolutely fine. On the other hand, if you’re planning to run an auction, Square won’t have the tools you need to manage tickets, paddles, and tables on its own. It also doesn’t have a full guest management solution for handling family guest records. 

Faith-Based Organizations

Since Square supports recurring donations, it’s a valid option for faith-based groups that accept regular contributions from their community, without having to give them anything in return. You can also use it for other types of church donations, like selling raffle tickets. It’s not as well-equipped for something like a benefit dinner, however, since there aren’t in-built tools for registration, seating management, or special requests.

Healthcare Foundations

Hospital and healthcare foundations can easily collect community donations through Square, or run community benefit sales. You’ll still need to consider the limitations regarding sponsorships, and guest records, however, as well as how you’re going to deal with unpaid pledges. 

Arts Organizations

Square is great for handling the sale of exhibition tickets and merchandise for arts fundraising, though it may not help you much with setting up an auction. You’ll still need extra software to deal with table management, and tracking the fair market value of anything you sell for charitable receipts.

Community Nonprofits

A Square reader and software should be fine for a food pantry running a neighborhood market, or a group running local giving drives. Still, once you’re selling sponsored tables or managing a live auction, there’s going to be more paperwork, which could mean you need to consider looking into additional software.

Square vs. PayBee: Which Tools Does Your Fundraising Event Need?

Square and PayBee are really focused on different things. Square is absolutely fine if all you’re worried about is accepting straightforward payments and donations. PayBee can handle secure payment processing too, but it’s more concentrated on giving groups tools for connected ticketing, guest management, and things like mobile bidding.

PayBee gives nonprofits more tools for managing everything that’s going on at and around a fundraising event. There are guest management tools to record everything from seating assignments to meal preferences, as well as features for setting up event website landing pages, tickets, and follow-up campaigns. 

The auction side is more complete too. PayBee assigns bids and pledges to specific guest carts, and volunteers can take payments through a mobile checkout or mobile app.

Technically, a nonprofit could use both Square and PayBee at the same time, using one for standard payment processing, and the other for full event management. The only thing to keep in mind there is that you’ll need to collect and manage separate records. 

Common Questions About Using Square for Nonprofit Fundraising

It’s natural to have a few unanswered questions about using something like Square for your nonprofit fundraising events, hopefully these answers will help.

Does Square Offer Discounted Nonprofit Processing Rates?

Not at this time; there aren’t any special processing rates available for charities, regardless of their registered status. You can discuss custom pricing options with Square if you’re collecting more than $250,000 a year, but you’re not guaranteed a discount. 

Can Square Accept Recurring Donations?

It can; when you create a donation link with Square, you can actually choose to accept recurring payments through that link. That should take care of collecting monthly gifts, but make sure you’re still watching for failed charges, and keeping donor information current.

Do Nonprofits Need a Card Reader to Use Square?

Not necessarily, you can allow your supporters to send donations through payment links, and compatible phones can also accept contactless payments with Tap to Pay. However, keep in mind that Tap to Pay will require an internet connection. 

Can Square Collect Donations and Sell Fundraiser Tickets?

Yes, with Square Online you can accept both donations and sell event items, including tickets and merchandise. With tickets, though, Square does say that organizers need to email redemption information to buyers separately, unless they’re using an additional service to automate that.

See How PayBee Handles Your Fundraising Event

If you’re planning an event with ticketing, guest management, auctions, and checkout requirements, take your details over to PayBee and book a demo to see how everything works together, and find out the full cost for your event. 

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