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Not all payment processors are created equal. Cash App for nonprofits is a common consideration, but will it work for your fundraising efforts?
Staying informed on everything from processing fees to security risks is the best way to make a strong organizational decision. Below is your complete guide on effectively using Cash App for donations, its advantages and limitations for nonprofits, and a step-by-step guide on setting up and managing Cash App donations.
Cash App is an online payment processing platform, with Square as its parent company. The payment services app supports peer-to-peer money exchange and focuses on a mobile experience for online transactions.
Cash App’s social component feels similar to Venmo for nonprofits. Users create $cashtags that link to a shareable URL that may look something like https://cash.app/$yourchosencashtag.
Here are some ways 57 million monthly users lean on Cash App:
Sending and receiving money, Bitcoin, or stocks with anyone, anywhere
Generating QR codes for others to scan and complete payments
Using a physical Cash Card for in-person purchases
The full guide: Cash App donations for nonprofits
Can nonprofits use Cash App?
There’s an appeal to use Cash App for nonprofits who want to simply collect donations. QR codes, cash cards, and mobile apps can offer modern giving options, but they may not offer the same experience as a strong donation website.
What are Cash App’s processing fees for nonprofits?
Cash App for nonprofits uses the same pricing as other business accounts. There is no special pricing for 501(c)(3) organizations looking to use Cash App for nonprofit donations.
Processing fees include:
2.75% per transaction made using a credit card
Free deposits
Additional fees for in-person POS tools
Important note: Some credit card issuers categorize Cash App transactions as cash advances. Those charges are often subject to higher interest rates.
How Cash App’s fees compare to other payment processors for nonprofits
Sometimes, the best way to learn about a potential tool is to hear from users who’ve used it and shared their honest reviews through Caperra.
“My favorite aspect of Cash App is the ability to transfer money to friends from my bank account. I also like the option to create a savings account through Cash App.” - Leah L.
“I have never had a problem with cashapp but it does take a a few more steps when orchestrating a transaction. There's been a few times I have forgot exactly how to check my balance & "transfer out" as I don't utilize this software every day.” - Renee W.
“I had my account randomly closed without any notice or reason. All they can say is I breached the terms of service. I tried reaching out but all the advocates can do it hide behind their pre-generated responses and say they have no additional information. I have to wait 30 days for a response on the case which for many like me is a major inconvenience. For an an online banking platform that is customer related, they have no customer service that actually answer any questions that are directly related to the real issue.” - Verified reviewer
Benefits of using Cash App to collect donations (pros)
Familiar interface
Cash App for nonprofits gives donors a way to give back that mimics popular apps and reduces the learning curve of a new interface. In 2024, the number of active monthly Cash App Card users jumped by 20% and continues to grow.
Donors can enable a Security Lock setting that requires a passcode, Touch ID, or Face ID to make a purchase.
Donors can opt into text or email notifications following every transaction
Instant transfers and deposits
Cash App for Business gives nonprofits instant deposits to your organization’s bank account for online donations without fees. That means nonprofit organizations see donations and funding faster in your bank account instead of the standard 1-3 business days.
What are Cash app limitations and considerations for Nonprofits? (cons)
Limited customer service
Cash App for nonprofits may come with challenges when you need support. The platform has a 3.6 out of 5 rating on Capterra for customer service.
Cash App’s website has some support articles, but few mention nonprofit donations or charitable organizations.
Zeffy is known for outstanding customer service and a team focused on nonprofit-specific support.
Lack of nonprofit-specific features
Cash App wasn't built for nonprofits, so fundraising outside a donation link is tough. Whether you’re looking to host events to increase church donations or want to set up a creative campaign for Giving Tuesday, Cash App can limit you.
The platform doesn't consider fundraising needs like:
Selling event tickets
Collecting in person donations
Accepting recurring donations
Collecting membership payments
Hosting raffles and lotteries
A well-rounded fundraising strategy might require adding nonprofit-specific tools to your tech stack.
The IRS requires charitable organizations to send receipts to donors for every transaction. Cash App doesn't issue tax-compliant receipts like other payment solutions.
Cash App for nonprofits isn't a donor management solution. You can’t view details about donors or segment supporters for meaningful outreach and retention with Cash App alone.
Cash App offers banking services, but the Federal Deposit Insurance Corporation (FDIC) does not insure an account. Only those using Cash Cards are covered by FDIC insurance and only up to $250,000.
Responsive Table
Summary of Pros
Summary of Cons
- Quick and easy donations: Donors can send money instantly with just a username ($Cashtag), making it simple for one-time gifts.
- Instant access to funds: Cash App allows fast withdrawals, and nonprofits can get funds in seconds if needed.
- Popular and widely used: Many donors already use Cash App daily, reducing friction in the giving process.
- Cash Card perks: If your nonprofit uses a Cash Card, you may benefit from cashback rewards on purchases.
- Crypto and stock donations: Supports Bitcoin donations, offering a unique option for tech-savvy donors.
- Security concerns: A donor only needs an email or $Cashtag to send money, making scams and fraud easier.
- Limited customer support: If there's a transaction issue, reaching a real person for help can be difficult.
- No tax receipt automation: Unlike nonprofit-specific platforms, Cash App doesn’t generate donor tax receipts automatically.
- Not designed for nonprofits: No built-in feature for setting up monthly donations or fundraising campaigns limits engagement and ability to raise money.
- Potential withdrawal issues: Some users report trouble accessing funds or withdrawal delays.
While Cash App isn’t built specifically for nonprofits, here are some features you can take advantage of when you’re trying to raise money and offer diversity and flexibility in how your supporters can donate.
P2P payments for simpler donations
Cash App allows nonprofits to receive donations instantly via phone number, email, $cashtag, or QR code. This makes it simple for supporters to contribute without the hassle of complex payment setups.
Nonprofits can leverage this feature for crowdfunding campaigns, peer-to-peer fundraising, and seamless donor transactions.
Nonprofits can use the Cash App Card to access funds and cover expenses. The card can be customized and added to a digital wallet for convenience. Security features like real-time transaction alerts help monitor spending, and there are no hidden fees.
Direct deposits for faster access to funds
With Cash App’s direct deposit feature, organizations can receive payments or donations up to two days earlier than traditional banks. This can help with budgeting and covering expenses without delays.
Cash App also doesn’t require a minimum balance or charge overdraft fees. It is essential, however, to note that each transaction has a cost that will deduct from your overall fundraising totals.
Cash App allows users to invest in stocks, ETFs, or bitcoin with small amounts. While nonprofits typically focus on direct funding, this feature could be helpful for organizations exploring investment strategies to grow financial resources over time.
How to set up Cash App for nonprofits: Step-by-step guide
Below, you’ll see how to get started on Cash App for nonprofits with a personal account, then transfer it to a business account to accept donations.
1. Download Cash App to your phone or tablet
Download the Cash App to begin the process. You must begin in the mobile application but can access your account on a desktop once it's established.
2.Create an account
Cash App requires you to start with a personal account and later convert it to a business account.
Follow these steps within the Cash App application:
Enter your phone number or email address
Cash App sends you a code through text or email
Enter the code to verify your information
Choose your $cashtag to create your unique donation link
Enter your zip code
3. Link a bank account
You'll want to choose a bank account that will only be used for fundraising activity to simplify reporting. The account you choose will be where you can access Cash App donations.
Click on the profile icon located in the top-right of the home screen
Select Edit Profile
Click on Switch to a Business Account at the bottom of the page
You’ll be prompted for information about your nonprofit to verify
You’ll see a green building icon to confirm your business profile is ready to use
5. Start fundraising with your Cash App donation link
Once you have everything set up, you can get creative about how you use your Cash App donation link in promotions, marketing, and public relations. It can be helpful to announce to donors that this payment option is now available so that they can take advantage of it.
6 tips and pitfalls to avoid when using Cash App for your nonprofit
1. Use a custom $cashtag
You'll want to choose a $cashtag that’s both professional and on-brand. This is how donors can find your nonprofit.
One easy way to choose a $cashtag is to use your social media handles. That way, donors will already be familiar with the username and can reach your donation link faster.
Important note: You'll only be able to change your $cashtag twice, so choosing one that will grow with your nonprofit is essential.
2. Creatively place QR codes
Cash App for nonprofits gives you a QR code that donors can scan from their phones to reach your donation link. You can make the most of QR codes by placing them where your donors already are such as social media platforms of somewhere they can scan on their mobile device.
You can place Cash App QR codes in places such as:
Physical merchandise
Coffee cups, centerpieces, or on napkins at an event
Signage or posters
Business cards
Direct mailers
Presentations
3. Use Cash App for social media engagement
Sharing your Cash App donation link through social media is easy. Make the most of the payment option by ensuring donors know there's an easy way to give on channels they love.
Consider adding your $cashtag or direct link to:
Profile bios
In-feed posts
Stories
4. Plan for the price of fundraising growth
Expanding fundraising beyond simple donation collection with Cash App will come at a cost. You'll need to add Square to Cash App to sell merchandise or accept payments in person at fundraising events.
Square's POS software comes with additional monthly and credit card processing fees.\
Since 2020, nonprofit trust has declined to 56%, the largest year-over-year change of any institution studied. Trust is everything to build loyal donor communities who continue to give.
It’s important to consider Cash App’s 2022 data breach that impacted around 8 million users.
When donor information is compromised, any of the following can feel the impact:
The advocacy of your mission
Donation volume
Community partnerships
Volunteer work
Support available for beneficiaries
6. Stay ahead of IRS complications
Tax implications exist if a personal Cash App account is used to receive donations. That means funding from an individual team member or advocate on their account is not a tax-deductible donation.
New IRS requirements will ask Venmo, Cash App, and Zelle to report users who exceed $600 in transactions per year by 2025. The money will be considered personal income instead of donations, which can impact peer-to-peer giving and other fundraising activities.
Consulting a tax professional or an IRS representative can help offer guidance.
The bottom line: Cash App for nonprofits
Cash App for nonprofits is a user-friendly way to accept donations online but lacks nonprofit-specific functionality. The platform also has a history of data security risks, high transaction fees, and customer service challenges.
Remember, your nonprofit always has fundraising software options like Zeffy that deliver simplicity with reliable support and robust fundraising options at no cost.
Yes, Cash App can be used for donations, but it is not designed explicitly for nonprofit fundraising. Nonprofits can receive donations through a $Cashtag or QR code, making it easy for donors to send money.
However, Cash App does not provide built-in nonprofit features like tax receipt automation, recurring donations, or donor management tools. If your nonprofit uses Cash App, track donations manually for record-keeping and tax purposes.
Eligibility for the Cash App security settlement depends on the specific terms of the lawsuit. As a nonprofit considering the app, you’re likely curious about this settlement and how it might impact you.
Affected users in a 2024 class action settlement experienced unauthorized access, data breaches, or fraud-related issues. It may help to read more about this incident and what the company is doing to counteract future challenges.
Upgrading to a free business account is ideal for nonprofits to accept a large volume of Cash App donations with instant deposits. Personal accounts limit transactions to $1,000 on a rolling 30-day period.
Cash App for Business also helps you organize annual donations to report to the IRS. The platform does not, however, issue tax-compliant receipts to donors regardless of whether you choose a personal or business account.
Zeffy offers nonprofits automated and compliant nonprofit tax receipts for every donation.
No. Cash App does not send automatic tax receipts and payment confirmations are not tax-compliant.
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