The Holy Grail of Nonprofit Tips ✨
Get all of the information you need to efficiently manage your nonprofit with our monthly newsletter.
square-for-nonprofits

Is Square a Fitting Payment Solution For Nonprofits?

Trish

Square is a commonly used nonprofit point of sale solution. It certainly is an interesting service; however, is it actually adapted to the needs of nonprofits? Let’s break down some of the pros and cons of Square for nonprofits. That way, you can make a more informed decision as to whether or not you would like to integrate this payment system into your organization. 

Let’s go!

No time to read this article now? Download it for later.

square-for-nonprofits-what-is

What is Square and How Does it Work for Nonprofits?

First, let’s discuss Square’s origins.

In 2009, Square was launched by two men, Jim McKelvey and Jack Dorsey. One year later, they shipped their first physical card readers. Barely another full year had passed and they were already processing millions of dollars in gross payment volume each week. By 2018, Square had acquired roughly 15 million regular users. Given the megalith it has become in the payment processing sector, it is no surprise that many nonprofits want to know more about it. 

Square for nonprofits is a flexible payment gateway. It allows people to make donations, purchase merchandise, and pay membership dues online or in store. When a user enters their card information into a terminal or an online form, Square begins to process the transaction. It encrypts relevant information, sends it to the bank, and the bank either approves or denies the transaction. With a reliable payment processor, you can give donors the option to use card payments instead of cash, which often expands their horizons greatly, with more money at their fingertips. 

square-for-nonprofits-what-isSadie is ready to learn all about Square for Nonprofits!

Square is well-known for having handy card readers that can easily attach to a cell phone or tablet. With these decidedly straightforward and uncomplicated readers, nonprofits can accept card payments anywhere, for example at a pop-up fundraising event, a farmer’s market, or at their physical storefront. Square also offers a few unique features specifically to nonprofits, including an online donation button that easily processes contributions made to your organization. They can also help you increase donor engagement by prompting them to provide feedback, usually via email after a purchase or donation has been made.

Pro Tip: Less and less people are using cash! Especially when bank cards make cashless transactions so easy. Only 16% of participants in this survey conducted by Travis Credit Union report always carrying cash, so make sure you are able to receive bank card payments. More places of business are becoming cash-free environments, which inclines most people to consistently carry alternative payment options on hand. The benefit of this shift to cashless spending is that a larger pool of possible funds are made available on a daily basis.This means virtually limitless spending and donating, as your supporters have their funds at their fingertips.

The Square Point of Sale app collects data from your customers and stores this information in your CRM, which allows you to engage with your customers on a more consistent basis. There is also a specific item type for donations, which allows you to accept online donations right from your website. You can customize your donation buttons and place them where you want them, which allows you to feature them on your landing pages. 

square-for-nonprofits-processing-fees

What are Square’s Processing fees?

Square charges flat-rate processing fees. That means they do not charge based on the type of card the purchase is made with. When you pay flat-rate fees, it makes credit card processing a little simpler. The fees and pricing models associated with credit card processing are pretty complex, and it takes a degree of patience to understand them as a beginner. Small businesses appreciate flat rates for taking the confusion out of the picture, allowing for seamless setup and efficient budgeting. 

Pro Tip: While many people consider this a simpler option, as it allows you to predict your monthly transaction fees more easily, it can also result in higher fees overall. It may save you the extra charge that some credit cards will cost to process, such as American Express, which carries higher transaction fees than most other cards, but it will also make the processing fees of every card type the same, including very common ones like Visa (and Visa is normally very cheap to process!). Because cards like Visa are more common, the overall financial advantage lies with varied processing rates.

Square does alter their processing rates, however, based on the type of platform your supporters are using to contribute to you. For starters, are they paying in store or online? And through what gateway? Below, we list the processing rates associated with these different types of transactions.

Payment Type

Processing Rates

Swipe, tap, or chip transaction on a physical square reader

2.6% + $.10% 

Manual entry of card number for in-app Square transaction

3.5% + $.15

Donations via the built-in Square donation buttons

2.9% + $.30 

 

square-for-nonprofits-account-set-up
How Can You Set Up a Square Account for Your Nonprofit?

First, double check your projected income for credit card sales. If it is higher than $250,000, you may want to speak with a Square representative on the phone. High-volume accounts are eligible for certain perks, and they can specifically review your case to make a decision on your account. They create solutions for organizations based on their specs. 

square-for-nonprofits-account-setupSamantha has her Square account set up and ready to take payments!

For an income below $250,000, you can get started right on Square’s website. Head over to the homepage, click "Get Started," and begin answering the questions for account creation. You will need a lot of personal info from the main account holder, like social security numbers, birthdays, and maybe your business EIN number. 

Once all the questions are answered, you can easily link your new Square account to the bank account of your organization, and get started right away. 

square-for-nonprofits-special-discounts

Does Square Offer Special Discounts for Nonprofits?

Unfortunately, no, there is no nonprofit discount. Square for nonprofits sticks to the flat-rate processing fees that it provides for all customers. This may prove to be problematic for nonprofits, who may prefer the discounted rates associated with other processing platforms.

In contrast, Paypal for nonprofits offers a discounted rate of 2.2% + $.30 per eligible transaction. Stripe nonprofit fees are likely to save you somewhere around .07% per transaction. It is up to you to explore all of your options, and it is a good idea to run the numbers based on your organization’s unique streams of income. 

square-for-nonprofits-how-is-square-different

How is Square Different From Other Nonprofits Payment Solutions?

Square has a built-in CRM, or customer relationship management tool. In one convenient place, Square allows you to store customer information and keep tabs on their interactions with your business. You can follow up with them about their purchase, send them updates, and more. This can be extremely useful for nonprofits who need a CRM in addition to a payment gateway. 

Pro Tip: If you truly want an all-in-one solution, try Springly. While not just a payment processor, Springly is built for nonprofits, by nonprofit experts. Build and create membership campaigns, accept donations, keep compliant will a full accounting suite, and more, you save time on your daily tasks which means you can focus back on the most important thing: your mission. 

Square usually receives a lot of recognition for being an affordable and easy-to-use option. To put it simply, they must have been doing something right! However, they are not infallible, as no service is. They differ the most with specialized nonprofit solutions, like Springly, which we created specifically with an intention to serve nonprofits. 

A potential downside to using Square is a lack of features, leading to a few limitations. There are other nonprofit payment solutions with similarly low rates, which may offer more bulk in the product. Some payment solutions offer more evolved CRMs, specially adapted for nonprofits. However, as an effective payment solution, consumers are still generally pleased with the service 

square-for-nonprofits-verdict

Verdict: Is Square Actually Adapted to Nonprofits?

It’s definitely true that Square for nonprofits provides a couple of special tools for nonprofits. They create a donation button that boasts seamless integration with your site, and they provide highly affordable readers for card-present transactions. They make it easy for members to make donations, and your associates will likely be able to navigate the service with ease. 

Their CRM is helpful to any charity that did not previously have a customer relationship management service, and it likely has everything you need for the basics. While there are other solutions that may have better integrations, Square will still get the job done when you need it to. In some ways, but not all, Square is well-adapted to nonprofits. 

square-for-nonprofits-final-thoughts

Final Thoughts

Choosing a payment gateway is difficult. There are many pros and cons to consider. If you are considering Square as a payment solution for your nonprofit, you should now have a clear idea of what to expect from this platform. It is not an all-in-one solution, but it certainly does work well for many small businesses. If you are looking for alternatives to Paypal, it certainly could serve your organization well. 

If you want flat-rate transaction fees, uncomplicated customization, and straightforward customer relationship management, Square for nonprofits has you covered. However, if you are looking for a payment solution that is specially designed and adapted to the needs of charities, you might have to look at other options. While Square presents some special features for nonprofits, it was not created with them specifically in mind, like Springly or iATS payments

Hopefully, this article has served as a guide to Square’s services. As with any big decision charities eventually have to make, this choice will be dependent on the unique needs of your organization. Explore other methods, such as Adyen payment or Google pay for charities. If you ask plenty of questions, keep notes, and take your time, you will surely find the best payment gateway for your nonprofit. 

Enjoyed the article? Download it to keep or share with others!


fundraising-social-media-posts-end

FAQ

💡 What exactly is Square?

A POS solution for small or large businesses with the option for card-present terminals. Find out more. 

🔑 Is there a Square offer for nonprofits?

No, not at this time. Find out more. 

📝 Is Square well-adapted to nonprofits?

They have great tools, but are not necessarily adapted. Find out more.  

Payment Processing
Trish
Member Management

Everything You Need to Know Before Buying a Membership Database Software

15 min read
Trish
Finance

A Detailed Breakdown Of Nonprofit Accounting Basics

9 min read
Trish
How to Start a NonprofitNonprofit Management

How to Build the Perfect Nonprofit Board of Directors

5 min read
Danica