Using Square for Nonprofit Donations: The Complete Guide

Choosing the right payment processing solution can make or break your nonprofit’s ability to fundraise effectively, especially when every dollar counts. For small, grassroots organizations working with tight budgets, limited staff, and personal donor relationships, “big box” tools like Square can feel out of touch.

If you’re wondering whether Square is the right fit for your nonprofit, this guide is for you. We’ll break down pricing, pros and cons, and alternatives to Square for grassroots nonprofits that better align with the realities of small, community-based organizations.

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What is Square?

Square is a large-scale financial services platform built to support small businesses. Jack Dorsey, one of the X (formerly Twitter) co-founders, founded the modern payment processing solution.

Square processed over 4 billion dollars in individual sales transactions in 2022. The app and card readers can turn any phone or tablet into a Square point-of-sale (POS) system to collect online and offline donations. ‍

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Can nonprofits use Square?

Beyond small businesses, charitable organizations can use Square nonprofit payment processing to collect donations. While the system is not built specifically for charitable organizations, it can support efficient payment processing.‍

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Square donation processing limitations

Processing fees

Every payment and card transaction results in a fee for nonprofits. Many sign up for the free plan without considering these hidden fees, and share feedback such as:

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“There are a lot of steps to set up new clients. Also, the fees are a bit on the high side.” - Michael L.

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There is no established Square nonprofit discount. Zeffy offers a 100% free alternative that never requires credit card processing fees. Donor tips cover transaction fees with Zeffy’s payment solution, and there are never platform fees to worry about.

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Limited customer support

Square’s customer support model primarily consists of online chat and tutorials. While that’s great for minor issues, it can leave your nonprofit without quick or focused answers. 

A lack of dedicated support can increase the time needed for resolution and efficiency and leave you with unhappy donors. 

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“Tech support is terrible. First they will get into the retail vs Web side of the house discussion, then once you get the right person, they never seem to know what features are or how to solve problems.” - John C.

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What are Square’s fees for nonprofits?

Square's free plan makes it easy for nonprofits to use the platform. Asking about various cost factors can help you understand the true cost. 

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Square also offers plan upgrades that come with additional costs: 

• Square Plus plan ($29/month + processing fees)

• Square Premium plan (custom pricing per organization + processing fees)

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All plans are subject to the following processing fees. Donation volume can help estimate the total expense. 

It’s important to note that there is no Square nonprofit discount.

Square processing fees

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‍Square additional costs for nonprofits

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Evaluating Square for small nonprofits: Is it a fit?

Unlike small businesses focused on profit, grassroots nonprofits run on heart, hustle, and shoestring budgets. Volunteers power them, rely on high-touch donor relationships, and often don’t have tech staff to manage workarounds. Square wasn’t designed with these constraints in mind.

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Let’s get even more specific about Square for small nonprofits:

• Not built for nonprofits: Square is designed for small businesses, so features for grassroots nonprofit donation processing (like automatic tax-deductible receipts or donor management tools) are limited.
  

• Recurring donations aren’t seamless: While possible, setting up and managing monthly giving may require workarounds or third-party integrations.
  

• No built-in donor CRM: Square doesn’t offer tools to track donor history or build donor relationships, which is often key for small, high-touch organizations.
  

• Transparent but flat fees: Square’s fees are clear but don’t offer nonprofit discounts, which can add up for organizations with tight margins.

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After saving $3,456 in fees and raising $69,117 by using Zeffy (built to support smaller nonprofits without the cost), Westerner Band Boosters shares:

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“It came down to nickels and dimes. You know, when we’re trying to scrape every penny we can to get these kids the things they need, like functioning instruments, savings in fees make a huge impact.” — Kelly, Volunteer Treasurer

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Every percentage point taken out of a donation matters when buying supplies, funding a program, or covering monthly overhead. That’s where payment processors for small to midsize charities like Zeffy make a meaningful difference.

Zeffy is built for nonprofits and offers 100% fee-free donation processing, passing along the full amount of every contribution. For many small teams, this isn’t just a nice-to-have; it’s a make-or-break factor.

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Key features of Square for nonprofits

Square online donations

Square allows donations to be added as items for sale on a website. Square Payment Links can also be shared with customers and donors to complete a transaction from any device.

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Payment options:

• One-time credit/debit card payments

• ACH bank transfers

• Apple Pay, Google Pay, and Cash App Pay

• “Buy now, pay later” (Afterpay) for merchandise sales or tickets
  
  

For nonprofits, this can provide a super-easy way to launch online donations quickly across event pages, pop-up giving campaigns, or drive-by donation options. The one limitation is that there is no native recurring donation option, so a workaround (like sending invoices monthly) is needed.

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Square point of sale app

Square for nonprofits opens up more ways to accept payments, including in-person gifts. The Square POS app accepts in-person payments at fundraising events, live gatherings, or on the fly.

Square supports in-person payments with mobile readers and terminals and remote options like invoices, ACH bank transfers, and phone payments. A feature like this could allow a nonprofit hosting a fundraising gala to accept card payments at the event using Square Terminal and follow up with those who pledged but didn’t pay on-site via emailed invoices.

That said, if you're looking for an even simpler in-person payment option, Zeffy’s Tap to Pay app (100% free-always)  allows supporters to tap to pay directly from their phones without needing a card reader. That means anyone on your team can collect payments anywhere, without hardware costs or setup time.

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Donation settings

Nonprofits can establish Donation Items in Square with the following customizations:

• A detailed title, description, and photo

• Suggested gift amounts

• Text modifiers for customizations like donating in memory 

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Funds can be transferred to a nonprofit’s bank account instantly (with a fee) or the next day (free). That’s helpful if you have a tight cash flow, such as when covering upfront costs for an event and needing donor revenue quickly.

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Square analytics tools

Square Analytics offers nonprofit organizations real-time insights into their organizational health as an advanced payment platform. A simple Square dashboard shows supporter, transaction, and organizational insights.

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Your Square dashboard surfaces data around:

• Managing transactions from online donation forms

• Fundraising event registrations and ticket sales

• In-person donations through the Square reader or POS app

• Recurring or membership gifts

• Payment details such as dates for a debit card transaction or when a donor’s credit card expires

• Merchandise sales

• Revenue from fundraising strategies

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For nonprofits, this means staff or board members can instantly review how much was raised during a campaign or event, helping inform future planning.

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Donor data collection

A nonprofit organization will gain a customer directory of donors to segment into audiences by relevant information such as:

• Loyal or repeat supporters

• Passive supporters

• Lapsed donors

• Event attendees

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Square's email and text templates help you reach different segments with relevant appeals. This can be useful for building a basic donor database and segmenting major gift prospects or frequent event attendees.

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Important to note: Square does not distinguish donors from customers, and there’s no field for donation intent, campaign designation, or giving frequency. There are also no tagging, notes, or segmentation features that align with donor stewardship or fundraising tracking.‍

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Automatic receipts

Any donation, registration, or merchandise purchase triggers an automatic confirmation to supporters through Square. The convenience eliminates the extra step of connecting a customer relationship management (CRM) or email service.

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Supporters can also turn off receipts as they would unsubscribe from emails. Receipts include basic transaction info such as:

• Item name

• Amount

• Payment method

• Your organization’s name and contact info

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You can customize receipt footers with a message like a thank-you note or tax ID number, which makes it easy to acknowledge donor contributions in real-time, especially for one-time online donations or in-person events.

Automatic receipts are helpful for donors needing proof of payment for reimbursement or tax purposes, although Square does not automatically generate IRS-compliant tax receipts with donation language like Zeffy does.

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Let’s compare for reference:

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Zeffy’s built-in tax receipts can save small teams time and energy, especially during high-volume seasons like Giving Tuesday or year-end appeals.

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Fast transfers

With Square's standard transfers, nonprofit organizations can receive money in a chosen bank account within 1-2 business days. 

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Square also offers upgrades for quicker transfer options:

• Instant transfers hit external bank accounts on demand with the speed of apps like Zelle, for a fee of 1.75% of the amount transferred.

• Same-day transfers hit external bank accounts on a customizable, automated schedule with a fee of 1.75% of the amount transferred. Business days may vary.

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Nonprofit payment processor comparison

Square is a reliable payment processor with user-friendly tools for in-person and online transactions; however, you may notice it lacks nonprofit-specific features found in alternatives like Zeffy. While Square charges standard processing fees, other platforms offer lower rates—or, in Zeffy's case, zero fees—tailored to the needs of nonprofits.

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How does Square compare to other low-cost donation platforms?

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Is Square or PayPal better for small nonprofits?

Both Square and PayPal are well-known options for collecting donations, but they’re not exactly tailored for nonprofits. PayPal offers nonprofit-specific features, such as customizable donation buttons and recurring giving, while Square excels with user-friendly tools for in-person donations. 

That said, both platforms charge transaction fees, which can eat into your fundraising total.

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What is the best payment processor for small nonprofits?

If you’re looking for a solution built just for nonprofits, with features like event ticketing, donor management, and zero processing fees, platforms like Zeffy may offer a better fit for long-term growth.

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Benefits of using Square for collecting donations

Flexible user interface

The simple app allows anyone on your team to use Square. A few clicks help users collect donations, contact donors, and manage donation activity. 

A free Square reader comes with your account, with the option to purchase more as needed.

Multiple ways to accept donations

Nonprofits can offer donors more ways to give with Square. Flexible options help you capture donors with any payment preference they may have. 

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Square currently supports the following payment options:

• Credit and debit cards

• Automatic Clearing House (ACH) bank account transfer payments

• E-wallet payments (Apple Pay and Google Pay)

• Cash App 

• Afterpay financing for large purchases

• Cash and paper checks for offline gifts

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Data and payment security

Square encrypts card information and promises never to store data after card transactions. Secure payment data is a key factor in establishing trust with donors. ‍

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Square for nonprofit donations setup guide

Square for nonprofits makes it easy to get started. Below is a Square donation processing guide to help you prepare and quickly use nonprofit-specific tools.

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Gather required information

You will sign up for Square with one individual main account holder, not an organization. Your choice of account holder will determine the information you gather in the preparation phase.

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Once you designate your nonprofit's account holder, you can gather the following information:

• Full legal name

• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)

• Date of birth

• Home mailing address

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Create a Square account

You can create your account at squareup.com where you’ll click on Get Started. 

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From there, you’ll follow the steps below to activate the account:

• Enter a preferred email address and confirm it, along with a secure password.

• Click Create Account.

• Select Nonprofit Organizations (MCC 8398) from the business type drop-down. 

• Enter your nonprofit and personal account holder information and click Continue.

• Answer a few questions to verify your identity and click Continue.

• Enter your phone number or email address.

• Square will send a link to your mobile device to download the Square Point of Sale app.  

• Tap the email or text message link to download the app to your device(s).

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Once your account holder downloads the Square app, you can complete the activation process. Nonprofits can then begin collecting donations right away.

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“Ease of use was the biggest draw to this product. Everything was a breeze to setup and was able to start selling our products within minutes of uploading photos and descriptions, couldn't be easier.” - Eric A.

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Set up donations with Square Payment Links

Once your Square account is set up, you can begin accepting donations quickly and easily using Square Payment Links that allow you to collect donations online without needing a full website.

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To create your donation links:

• Navigate to Orders & Payments, Invoices & Payments, or simply Payments > Payment Links in your Square dashboard.

• Click Create Link, then select Accept a donation and click Continue

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To customize your link:

• Add a title that supporters will see (e.g., "Support Our Summer Youth Program")

• Choose a frequency (one-time or recurring)

• Optionally, add a description and upload an image to create visual appeal

• Toggle on Set donation goal and enter the amount you're aiming to raise and a deadline to create urgency (e.g., to meet a matching gift deadline)

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”Our website looks great, runs well and gives a great impression to our guests. Combining the ease of use with the complete integration into our Square POS systems makes updating automatic.” - John L.

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Checklist: What to look for when choosing an online payment system to get donations

Experience is everything when it comes to your online fundraising efforts. Your donors aren’t just customers but passionate supporters seeking a connection with a cause.

Choosing an online payment system is about the least friction in your donors’ experience. Equally as important is making sure every dollar possible goes to your mission. 

Nonprofits should consider the following items when choosing an efficient online payment system.

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✅ Nonprofit Costs

Are you confident about transaction fees, plan fees, and expenses for functionality you may need in the future?

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✅ Ease of donations

Have you looked at the platform’s donation experience from the lens of a donor? Can you create a donation form for completing transaction without friction?

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✅ Branded experiences

Do you have the right amount of customization options? Can you add a personal touch with custom questions and language preferences?

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✅ Donor management and relationship building

Can you access donor information and transaction history in one place? Can you collect donor information and ensure it's available whenever you need it?

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✅ Relationship building

Is it user-friendly to segment donors and crate tailored engagement? Do you have automatic emails that go out after a donation?

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✅ Diversified online fundraising efforts

Does the platform support peer-to-peer fundraising, event management, and recurring donations? Is it easy to track and manage donations across campaigns? 

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✅ Future growth

Can you embed your donation form on your website and social media?

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How to switch from Square to Zeffy for nonprofit donations

Square is a helpful and simple-to-use tool. However, there are some trade-offs in cost and support for nonprofits specifically.

Switching from Square to Zeffy is pretty straightforward. Start by creating a free Zeffy account and setting up your donation forms, events, or campaigns using their nonprofit-specific tools. 

Once you're ready, update any donation links on your website, email newsletters, and social media to point to your new Zeffy pages. You can also inform supporters about the switch so they’re in the loop and excited that 100% of their gift goes directly to your mission. 

Zeffy even offers support to help with the transition if you need a hand.

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Square vs Zeffy for nonprofits: Which is better? 

‍Zeffy is a 100% free alternative to Square. The fundraising platform is built for nonprofits by a team that is available whenever you need it.

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Square for nonprofits: FAQs

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