If you work in a nonprofit, you know how challenging it can be at times to balance tight budgets with charitable work. You might have different vendors to manage and plenty of purchases to make. A convenient payment tool like a credit card can give you the flexibility you need to keep your operations going without having to pay cash upfront all the time.
When looking for the best credit card for your nonprofit, it’s important to select one that not only helps you or your organization build credit but also allows you to maximize your donors’ money through cashback and other credit card rewards. The best credit cards often come with no annual fees and long 0% introductory APR rates.
In this article, we look at some of the best credit cards available for nonprofits.
Why do nonprofits need credit cards?
Although nonprofits might seem different from businesses because of their tax-exempt status and reliance on donations, they’re still subject to the same administrative expenses. Nonprofits, just like regular businesses, need to buy equipment, organize team lunches, and pay for mobile plans, among other expenses, to keep operations running.
The easiest and arguably safest method of paying for these expenses is by using a credit card. Credit cards offer your nonprofit a credit line that allows your staff to conveniently pay for items and services without needing to use their own money. Accountants and managers in your nonprofit can use this separation of accounts to keep business purchases separate and organized for doing taxes.
Credit cards can also protect your nonprofit from fraud and property damages. Most cards come with a zero liability policy, which means that you won’t be held responsible for unauthorized charges on your card. Other cards may offer purchase protection on top of this, enabling your nonprofit to recover the cost to repair or replace stolen or damaged electronic equipment within 90-120 days of buying it with your credit card.
Can I get a credit card for my nonprofit organization?
Yes, you can get a credit card for your nonprofit. While a nonprofit is not technically a business, several credit card issuers may offer you a business credit card provided that you meet their requirements. There are also special charity credit cards available from non-profit-oriented credit card issuers like Charity Charge.
Although credit cards can help increase your nonprofit’s budget, there is a catch to using them.
Since nonprofits are designated as 501(c)(3) organizations with special tax-exempt status, credit cards cannot be used for personal reasons, such as going for restaurant dinners with your family. If the auditors or Internal Revenue Service (IRS) agents discover that the nonprofit credit card is being used for personal gains, your organization could lose its status.
You should choose credit cards based on the size of your nonprofit and its regular expenditures. Most business credit cards offer rewards such as cash back on gas, office supplies, and groceries, which could be used to save on expenses.
The only downside to business credit cards is that a board member or the Executive Director of the nonprofit has to personally guarantee the card and link his or her credit score to it. If this condition is inconvenient for you or your board members, you could consider getting a non-profit-oriented credit card that doesn’t require a personal guarantor.
What are the features to look for when choosing a credit card for your nonprofit?
As a nonprofit, you probably won’t need the same travel and hotel benefits that come with most business credit cards that charge an annual fee. What you might want instead is a card with little to no fees and a generous rewards program that helps you maximize your purchases.
No annual fee
A credit card with no annual fee is widely considered by many nonprofit executives as the most important feature, especially for nonprofits that are just starting.
In the first few months or years of operating your nonprofit, donations may be slow and not enough to cover your operational expenses. A no annual fee credit card can help reduce the pressure of paying for these expenses while also giving you the funds to make large purchases as you set up your organization.
No personal guarantee required
Another feature you should look for is the ability to register the credit card in your nonprofit’s name without the need for a personal guarantor. Being able to do so has multiple advantages for your organization.
Your organization will receive a federal tax identification number recognized by the credit bureaus, which will allow you to start building a credit score for future loans or higher credit limits that you’ll need as you expand your organization. You’ll also remove the pressure from yourself, or from any of your staff, to be personally liable for any debt that is accrued by your nonprofit.
When comparing credit cards, also look out for rewards offers that can help you save costs on the items and services that your nonprofit needs most.
Most business or non-profit-oriented credit cards allow you to earn up to 3% cashback and/or points on gas, office supplies, restaurant meals, car rentals, and utilities. If your staff need to travel regularly, a credit card could help you keep costs low.
What are the 3 best credit cards for your nonprofit organization?
With so many credit cards on offer, it can be difficult to choose the right credit card that matches the needs of your organization. We’ve highlighted three credit cards that come with the most favorable introductory terms, damage protection, and rewards program to help you save on expenses.
Ink Business Cash Credit Card
For medium to large-sized nonprofits that spend a lot of money on office supplies and internet and phone bills, the Ink Business Cash credit card can be a lifesaver.
This business credit card allows you to earn 5% cash back on the first $25,000 spent each year on Internet, cable, and phone services as well as office stationery and equipment. You’ll also earn 1% cashback on all other purchases, with the chance to receive $750 in bonus cash back after spending $7,500 within 3 months of opening your account.
Plus, for the first 12 months of getting this credit card, you’ll be given a 0% introductory rate, followed by a variable APR of 13.24% to 19.24%. This card comes with no annual fees to help you save costs.
On top of these perks, the Ink Business Cash credit card offers free employee cards that can be given to your staff. You’ll also receive an auto rental collision damage waiver that protects you and your staff when you rent cars on business trips.
Charity Charge Nonprofit Business Mastercard
Alternatively, you could consider the Charity Charge Nonprofit Business Mastercard that comes with no annual fee and no requirement for personal guarantees. This credit card is specially designed for nonprofits to help them build an organizational credit history, enabling them to apply for more loans and higher lines of credit in the future.
With the Charity Charge Nonprofit Business Mastercard, nonprofits receive 1% cashback on all of their purchases and exclusive deals at FedEx, Staples, Enterprise, and 200 other business vendors through the card’s partnership with PurchasingPoint, a discount program for nonprofits.
In addition, Charity Charge sends you an annual itemized receipt of all of your tax-deductible charges to reduce your accounting workload. The only disadvantage of this card is that you won’t receive a 0% introductory APR like other business credit cards.
American Express Blue Business Cash Card
If your nonprofit spends a lot in different categories, then the fixed-rate American Express Blue Business Cash card can help you earn 2% cashback on everything you purchase. You’ll receive a 0% introductory APR for 12 months after account opening plus extra employee cards that can be given to your team leaders.
This card also comes with an Expanded Buying Power feature that allows you to spend beyond your credit limit. The extra predetermined amount is based on your previous payment history, credit record, and existing balance.
Another credit card that can help your nonprofit make a positive impact
The Aspiration Zero carbon credit card from the B Corp-certified online financial institution Aspiration can help your nonprofit save on expenses while fighting climate change at the same time. This credit card tracks the carbon emissions from your purchases and gives you the option to buy automatic carbon offsets that help you balance out your carbon footprint each month.
Each month that you reach carbon zero with this card, Aspiration gives you 1% unlimited cash back on all qualifying purchases made with the card. Aspiration does not invest any money in fossil fuel companies, making us a great sustainable financial partner for your charitable organization. We contribute a percentage of our earnings instead to reforestation and community development projects around the world.
Visit our website to learn more about the Aspiration Zero credit card.