Should nonprofit finance groups use Venmo to collect payments?

If you run a nonprofit group, you likely need practical solutions for accepting membership dues, donations, and other types of group payments. However, collecting online payments for groups presents unique challenges that make finding the right platform critical. While Venmo may seem like the obvious choice for payment collection due to its accessibility and familiarity, it lacks the features, security, and reliability necessary for group use. Moreover, using Venmo as a nonprofit group carries risks that you should consider before making it your go-to tool for payment collection. Read on to learn why Venmo may not be the best choice for nonprofit groups, and discover how to choose the right payment collection solution for your group's needs.
Should nonprofit groups use Venmo?

What Is Venmo?

Venmo is a popular platform for making personal, peer-to-peer mobile payments. It is now owned by PayPal, the largest online payment processor in the world. Unlike PayPal, Venmo is specifically designed for personal transactions, such as paying back a friend for lunch.

Venmo has grown to handle over $230 billion in transactions annually, with a focus on personal use. However, some of this growth has been due to groups, such as nonprofit organizations, using Venmo in unintended ways. This can put groups that use Venmo for donation and payment collection at risk, as Venmo does not provide the same consumer protections needed for non-personal transactions.

Is Venmo a good choice for nonprofit groups?

In general, Venmo is not the best option for collecting payments for your nonprofit group. While Venmo is easily accessible, it lacks some key features that help nonprofit groups stay compliant with tax-exempt regulations put in place by the IRS. It’s also important to note that Venmo states that its platform is not intended for collecting charitable donations. While many small nonprofit groups don’t pay attention to these rules, running your organization the right way requires putting some consideration into the payment platforms you use for your group. Furthermore, connecting your group’s Venmo account to your personal bank account can lead to risky tax implications, especially if you collect over $600 annually for your group.

Why Venmo isn’t the best choice for nonprofit groups

Venmo is not the ideal option for nonprofit groups for several reasons. One major issue is that their service agreement prohibits the use of their platform for charitable contributions. Despite this, many groups still use Venmo. However, they often encounter unexpected difficulties when it comes time to complete their tax-exempt forms for the IRS.

There are several reasons why Venmo may not be the best fit for nonprofit groups, including:

  1. Venmo does not provide a solution for tax-exempt reporting, which is vital for nonprofit organizations. Payment collection software designed for nonprofits allows you to handle the entire reporting process seamlessly and organize all of your payments correctly. With Venmo, you will have to manually sort through all of your transactions afterwards when it comes time to file taxes. This means dealing with payments that have no payment details attached or having to scroll through months of payments to locate a specific payment you’re looking for.
  2. Venmo accounts are created by individuals, making them a poor choice for groups or organizations. You cannot provide access to the account to other individuals aside from sharing your own login information and password, which represents a major security breach.
  3. If the person responsible for the Venmo account leaves the organization, you will be left in a challenging situation. Venmo accounts are supposed to be for individuals, so there are no measures in place to handle a proper officer handoff.
  4. Balancing your books with Venmo is challenging. Unlike payment software designed for nonprofits, Venmo only provides a chronological list of transactions, making it difficult to distinguish donations from dues collection. There are no specific payment details unless the sender enters them on their own accord.
  5. Venmo is not a suitable option if you need to collect information in addition to payments. If you plan on collecting waivers, forms, or other types of information from your members, Venmo does not have a solution for that.


For these reasons, while Venmo is an excellent option for personal payments to friends and family, it is not recommended for regular use by nonprofit groups.

Other options for collecting payments for nonprofit groups

With Venmo out of the running, there are still great payment collection solutions that can work for your organization.

  • Other online payment processors, such as PayPal, are not just for personal transactions. However, this option requires your members to sign up for the platform, and you may face higher transaction fees.
  • Using checks and cash avoids the need for members to use any platform and keeps fees low. However, this option can make collecting funds more challenging and increases the risk of accounting and reporting errors.
  • Choosing a nonprofit payment collection solution like Crowded makes it easy to collect payments online while keeping costs low. By selecting a solution that meets your specific needs, your organization can enjoy the benefits of both convenience and compliance.


Choosing the right payment collection solution can have a significant impact on the time and money required to run your nonprofit group.

The benefits of using Crowded to collect payments for your nonprofit group

Crowded offers a practical and straightforward solution for easy payment collection for your nonprofit group, among other features that can benefit your organization. Our comprehensive web and mobile app provides everything you need for your organization to thrive and grow, without expensive subscription fees or complex user manuals. Here are some of the benefits you can expect from Crowded:

Convenient payment collection

Collecting payments has never been easier when you choose Crowded for your nonprofit group. Our versatile payment solution allows you to create a payment link for a variety of needs, including membership fees and donations. It can be used for a range of membership groups, such as booster clubs, fraternities, sororities, PTAs, Girl Scouts, Boy Scouts, and more.

We offer flexible payment solutions so that you can choose the method that makes the most sense for your group. These options include in-app payment collection, in-person payments, or open payment links that can be accessed without having to log in to a website or app.

We designed Crowded to make payment management easy for your organization and convenient for your members. You can create payment requests with tiered amounts and due dates and add on an option for form or information collection. This lets you track payments and group info seamlessly using one solution.

Multiple payment methods

One of the most important criteria for any effective online payment collection app is accepting multiple payment methods. With Crowded, you can let your members pay their way, smoothing out any difficulties and making payment as easy as possible.

Your members can pay using credit, debit, or ACH transfers. Payments are made securely through Crowded, so your members can rest easy knowing their financial information is safe. With multiple payment methods through a trusted solution, you can get more members on board for online payments to make payment collection much easier for your group.

Low fees

As a nonprofit organization, your top priority is to ensure that the money you collect goes toward your activities, rather than administrative costs. Our fees include 3.5% for card payments and the lesser of 3% or $5 for ACH payments. These fees are paid by the payer and do not impact your organization’s funding.

How Crowded helps nonprofit groups streamline their banking

Crowded offers a practical and versatile solution for your online payment processing needs. With Crowded, you can easily raise funds and collect dues, ensuring a smooth experience for your members and donors. However, payment collection is just one part of what Crowded offers for nonprofit groups.

Crowded’s platform is built with embedded finances, which means that you can also create a banking account for your group on Crowded and collect funds that go straight into your account, without the need to withdraw and re-deposit your funds. Crowded provides nonprofit groups with free banking accounts with no subscription fees or minimum balances – perfect for nonprofit groups looking for an accessible and affordable solution. As you collect payments on our platform, you’ll also benefit from clear and complete documentation for streamlined accounting and reporting. You can even connect your account to Quickbooks or Xero. You’ll never have to worry about reconciling accounts and records because they’re all in one place.

After collecting funds for your organization, you also need a way to spend them on your various expenses and purchases. Crowded makes that simple, too, with digital and physical Visa® debit cards for member spending. No more dealing with receipts and reimbursements. Instead, you can set budgets and track member spending directly through Crowded’s web and mobile app.

We make the administrative aspects of nonprofit banking simple and intuitive, too. You’ll always have the accounting and reporting you need to keep up with tax compliance. It’s also easy to hand over the operation of your nonprofit accounts whenever your organization finds itself with a new treasurer.

How you can get started with Crowded today

Getting started with Crowded is a straightforward process that will have you collecting payments and managing money online in no time. To begin, simply sign up for Crowded and create your account. The entire process takes place online, and you only need the essential documents required for any bank account. If you need help organizing these documents, we can assist you.

Not sure if Crowded is the right solution for your nonprofit organization? Interested in learning more about our features? You can schedule a demo with our team today to see how Crowded can benefit your nonprofit group or organization. We are happy to answer any questions you may have.

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