Square, founded in 2009 by Jack Dorsey and Jim McKelvey, was originally developed to help small businesses easily accept credit card payments via mobile devices. Over time, it has grown into a versatile financial platform, offering a range of tools for managing transactions, tracking sales, and engaging customers. While Square is primarily designed for businesses, its flexibility, ease of use, and secure payment processing make it a compelling option for nonprofits looking to enhance their fundraising efforts.
Square’s Appeal to Nonprofits
Although Square is not specifically tailored for nonprofits, many organizations have found it to be a valuable tool for managing donations, allowing your organization to make donating easy, especially as carrying cash becomes less common, and mobility and simplicity are becoming a success key. Nonprofits benefit from Square’s ability to accept payments on-the-go, provide instant receipts, and offer basic donor management features, all without the need for specialized equipment or extensive technical knowledge.
With that in mind, this guide will outline the potential benefits of using Square for your nonprofit and walk you through how to get started.
9 Reasons Why Square Could Be a Good Fit for Nonprofits
You might be thinking, Sure, it’s easy, and other nonprofits have used Square successfully. But why should your organization use Square?
1. Potentially waived fees
While Square doesn’t offer nonprofit-specific discounts, its transaction fees are competitively priced at 2.75% per swipe. If your organization processes more than $250,000 annually in card transactions, you may even be eligible for a custom rate. This makes Square a cost-effective option for nonprofits that need to keep overhead low while maximizing donations.
2. Flexibility and Portability
One of Square’s key strengths is its ability to turn any smartphone or tablet into a mobile cash register. This flexibility is particularly beneficial for nonprofits that need to collect donations in various locations—whether at a fundraising event, a charity run, or even door-to-door. The Square Point of Sale app enables you to process payments anywhere, even without an internet connection, making it a reliable option for events where connectivity might be an issue.
When you set up a Square account, you’ll receive a free Square reader to securely process donations from credit cards. With this and the Square Point of Sale app, you can process payments (even when you don’t have a signal), print or email sales reports, customize tax and discount codes, and receive deposits to your Square account within 2 business days.
3. Ease of Use for Teams
Square’s user-friendly interface allows multiple users, such as volunteers and staff members, to accept donations on your organization’s behalf. You can easily monitor fundraising efforts in real-time, track individual performance, and manage multiple events simultaneously, which is crucial for nonprofits that rely on volunteer-driven initiatives.
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4. Instant gratification (and confirmation)
With Square, donors receive instant confirmation of their donations via email or text message. These receipts can be customized to include all necessary tax information, ensuring that your nonprofit remains compliant while providing donors with the documentation they need. This instant feedback also helps to build trust and enhance the donor experience.
5. Simple Donor Feedback Collection
Square automatically provides donors with an option to give feedback on their experience. This feature is a straightforward way for your nonprofit to gather insights and improve future fundraising efforts, potentially boosting donor satisfaction and retention.
6. Donor Engagement Tools
Square offers built-in features that can help you engage with your donors more effectively. Although it’s not a full-fledged CRM, Square can automatically categorize donors based on their donation behavior and frequency, allowing you to send targeted messages quickly and easily. This functionality can be a helpful addition for smaller nonprofits that may not have a dedicated CRM system in place.
7. Access to Real-Time Data and Analytics
Square’s analytics tools give you a clear view of your fundraising efforts. You can track which events or activities are generating the most revenue, compare different fundraising strategies, and adjust your approach based on real-time data. This level of insight can be particularly valuable for nonprofits looking to refine their fundraising tactics.
8. Additional Tools and Services
Square is more than just a payment processor; it offers a range of additional services that could benefit your nonprofit. These include the ability to build a simple eCommerce site, manage appointments, and even process payroll. These tools can help streamline your operations and reduce the need for multiple service providers.
9. Strong Security Features
Security is always a concern when handling sensitive donor information. Square provides EMV-compliant card readers and adheres to PCI standards, ensuring that all transactions are secure. Additionally, Square assists with compliance for Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, which can help protect your organization from potential risks.
How to Get Started with Square for Your Nonprofit
If you believe Square could be a good fit for your nonprofit, setting up an account is straightforward:
1. Evaluate Your Transaction Volume
If your nonprofit processes a significant amount of transactions annually and anticipate more than $250,000 in credit card transactions for sales or on-the-ground donations, we recommend reaching out to their team before setting up your account to see if your organization is eligible for waived processing fees.
2. Set Up Your Account
You’ll need basic information to set up your account, including the Social Security number and birthdate of the primary account holder. While an Employment Identification Number (EIN) is optional, having it can streamline the process. Even if the account is being used by your nonprofit organization, Square still requires information about the main account holder. You can create profiles for different users so that members of your team can use the account without accessing your information.
3. Connect Your Bank Account
Link your nonprofit’s bank account to Square to ensure that funds from donations are transferred efficiently.
4. Start Accepting Donations
Once your account is set up and you’ve received your Square card reader, you can begin collecting donations. If needed, you can also explore additional hardware or services that Square offers to further support your fundraising activities.
If you want to get extra hardware or use some of their add-on features, you can purchase them here.
Check out more resources for raising money online with our guide to digital fundraising. Want more options? We have a roundup of donation platforms for nonprofits and fundraising websites. You can also check out our guide on choosing the best CRM for your nonprofit, and a roundup of some of the nonprofit CRMs we recommend most often to clients.