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How to Choose a Nonprofit Business Debit Card for Your Organization


Managing nonprofit revenues and expenditures is an essential part of running your organization, and a nonprofit business debit card can help keep track of expenses and make purchases from vendors simple and convenient. In this article we will take a closer look at credit card processing for nonprofits, how to determine banking needs as well as how to meet them with a nonprofit business debit card, and what features to look for when choosing one for your organization. 

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What is a Nonprofit Business Debit Card?

Similar in concept to personal debit cards, a nonprofit business debit card allows organizations to draw from and deposit funds into their bank account. Some banks offer them 0% introductory rates and no annual fees along with other perks and rewards as a result of their nonprofit status. 


Advantages and Disadvantages of Using a Nonprofit Debit Card vs Credit Card

A nonprofit business debit card and a nonprofit credit card have a lot in common and can be used in similar ways. Organizations can use these cards to pay vendors, purchase office supplies, or fund travel for nonprofit business. But there are a few differences between these cards and how they operate. Here are a few advantages and disadvantages of using a nonprofit business debit card vs a business credit card:

non-profit-business-debit-card-advantages-disadvantagesMatthew is ready to learn all about how to choose the right debit card for his nonprofit!

Advantages of Using a Nonprofit Business Debit Card

  • Better control over money spent - because it is attached to a bank account, you will have immediate reckoning of expenditure. 

  • A debit card allows you to have more oversight; you can set approval limits and set up notifications so that you must approve purchases before they can go through. You can even restrict purchases on your bank card card. For example, you can release a card to a staff member for travel that can only be used on fuel purchases. 

  • No credit approvals necessary

  • No interest charged on the balance

  • No credit line to tempt your organization to spend beyond its means, helps you stay within your budget

  • Protects against potential embezzlement

Disadvantages of Using a Nonprofit Business Debit Card

  • Purchases are not typically made in as timely a manner as they are with 501c3 credit card processing, and require a lengthy purchase-to-procurement process. 

  • A nonprofit credit card can offer certain rewards, like cash incentives, travel miles, or even donation incentives. 

  • Smaller nonprofit organizations cannot take advantage of a credit line to enlarge their scope. 

Pro Tip: The fact that some organizations cannot have large credit lines can in fact be a pro, depending on how careful and responsible their finance professionals are with money. No large credit line means you have less of an opportunity to put your nonprofit in debt!


Determining Your Organization’s Banking Needs

Before even beginning the search for a nonprofit business debit card, it is important to take stock of what features your organization is looking for. Some perks, like no annual fees, will benefit any company. Others are more specialized, and will benefit some nonprofits more than others. 

Ask yourself these questions:strong> How will your organization be using its debit card? Will it simply be for making purchases? Do you plan to have one card on file with your finance person, or will several cards be handed out to employees? Sit down with your management staff to hash out exactly how your bank card (or cards) will be used. 


What Features to Look for in a Nonprofit Business Debit Card 

When you have a good idea of what you are looking for in a bank card, you can dive into researching different banks. There are a few things to take note of when you are shopping around for one. 

non-profit-business-debit-card-features-to-look-forSalma is taking notes on what to look for when she's looking for a nonprofit debit card.

  • Find a bank that has experience working with nonprofits. There are banks that have a high percentage of nonprofit clients. These are the banks to look for, because they will have experience in special financing, bonds, and applying for tax-exempt loans. They can offer better advice and help you navigate nonprofit-specific banking procedures. 

  • Special Nonprofit Accounts. Some banks waive monthly service charges if you keep a certain amount of money in your account. 

  • Treasurer services. If you work for a smaller nonprofit organization that does not have a treasurer, some banks will offer this service for a fee. 

  • Training for money management. Some banks will offer webinars and other training to help nonprofits learn how to maximize fundraising and manage money more efficiently.

  • Debit cards connect with other payment processors. This includes things like GooglePay, PayPal, and ApplePay. This type of payment processing for churches and other charities can simplify the donation process. 

  • Strong online customer service support. You do not want to be stuck with a problem or question and not have immediate recourse. Make sure you choose a bank and card that has high customer service reviews, and excellent accessibility (24/7 support is ideal). 

Pro Tip: Nonprofits could greatly benefit from using a credit union for their financial needs. Credit unions are in fact nonprofit financial institutions. They are owned by their members, meaning that their profits go back to them, not shareholders. They offer lower rates on loans and higher dividends on savings. Credit unions do not charge monthly fees or have account minimums to maintain, and most of them offer the same technology as for-profit banks, such as online banking.


Final Thoughts

A nonprofit business debit card has its advantages and disadvantages. Credit cards, in comparison, offer a line of credit, rewards on purchases, and frequently-superior security. But for nonprofits who are looking to keep a close eye on spending and money management, using nonprofit debit cards can be a life-saver. They are also more accessible to organizations that are just starting out and may not be ready for or able to apply for credit. 

When looking for a bank to work with, think about your nonprofit’s goals. Do you need a lot of financial assistance, or are you just looking to simplify your spending with a bank card? Do you require multiple accounts? If you have existing accounting software, does the bank offer integration for this software? 

Some banks offer certain unique features that could benefit your nonprofit and others like yours, while other features are more universal. For example, most banks link up with card payment machines for charities, and most nonprofits need them to.

Talk to a customer service representative to make sure you have a thorough understanding of what they can offer, and whether the bank meets all of your organizational needs. Then you will be well on your way to a more streamlined and efficient financial management system for your nonprofit. 

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💡 Can a nonprofit use a personal bank account?

It is a best practice to separate personal and business accounts. Create a dedicated account to your nonprofit to ensure that there is no confusion or lack of transparency in your financials. Find out more. 

🔑 What should be on a nonprofit business card?

You can use a nonprofit business card to handle the business end of your organization. It can be used to pay vendors, purchase office equipment, or for other business expenses such as travel. Find out more. 

📝 Can a nonprofit organization have a bank account?

Yes, a nonprofit organization can have a bank account. In fact, it’s essential. As a business, you should set up a separate account for your nonprofit to avoid commingling funds. Find out more.  

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