Charity Credit Card Processing: Do Your Donations Work Differently?

Beggar, The Statue, Figure, Charity, The Wanderer

{{Sometimes the full amount of a donation doesn’t always reach the person or group we intend it for.}}

When you donate to a charity, it’s natural to wonder: “How much of my donation will actually reach the person or group I want?” 

Did you know that only about 60% of the average donation goes to those in need? That means for every $1 donated, charities spend an average of 40 cents on costs such as credit card processing fees, administrative expenses, and marketing. 

It can be hard enough as a smaller charity to receive an adequate amount of donations, but to also have to contend with credit card processing fees that eat up a sizable chunk of donations can be an expensive cost of doing business. 

In this article, we’ll talk about how charity credit card processing works and what percentage of your donation may be swallowed by these fees.

Credit card processing options for donations

Charity credit card processors are third-party companies that specialize in working with nonprofits and other charitable organizations. They typically handle everything from collecting funds to ensuring donors’ information remains secure during transactions.

For example, if your preferred nonprofit accepts online donations, they may work with a charity credit card processor that has an e-commerce solution. This allows donors to make their donations via the charity’s website and ensures all transactions are secure.

A charity credit card processor will typically take care of everything from processing payments to sharing donor information received online.

What charity credit card processors do NOT do

Before we go any further, it’s important to understand that charity credit card processing companies don’t manage your donation–they just facilitate the transaction between you and a charity. This means: 

  • They won’t tell you how much of your donation goes directly to the charity’s cause (unless the charity credit card processing agreement with the charity specifically states otherwise)
  • They won’t tell you how much the transaction and processing fees are

Charity credit card processors typically charge a flat percentage fee per transaction. 

This is usually charged in addition to any other fees that may be incurred based on which payment method donors use (e.g., debit or credit cards). However, charity credit card processors may also charge an additional fee per transaction if the charity doesn’t meet a predetermined minimum.

Merchant accounts for charity credit card processing

If a charity has a merchant account, it means they have an agreement with the charity credit card processor to accept debit and credit cards. This is different from having a charity gift card or prepaid credit card option, which only work at specific retailers (and may carry fees of their own). 

In other words: If you want to donate and the charity doesn’t accept credit cards–or offers prepaid gift cards instead of charity credit card processing–you’ll need to contact your charity of choice to get information on how you can donate.  

Payment gateways for charity credit card processing

Not all charity credit card processors offer the same features. 

For example, some charity credit card processors allow for recurring donations (where someone donates regularly). Others might only provide one-time online transactions or require donors to call in their donation information over the phone before it’s processed. As you can see, charity credit card processing can play an important role in how much money reaches the charity.


Another charity credit card processing option that’s becoming increasingly popular is aggregators. Aggregators are charity-specific payment portals that allow you to donate directly to multiple charities at once. These types of charity aggregation sites often allow donors to search for a charity by cause, location, or social issue. 

For example, you might be able to search for a charity that works with cancer research or for a charity that focuses on animal welfare. They work by charging your credit card one time (for the total amount of all donations made) and then disbursing each charity their respective share.

This way, you can make several different donations to multiple charities without having to worry about separately processing each payment or incurring separate charity credit card processing fees.

What Are Credit Card Processing Interchange Fees in 2021?Do charities pay credit card processor fees?

Many charity organizations have agreements with their charity credit card processors that allow them to take advantage of special rates not available to the general public. 

Charity credit card processors may waive or reduce charity rates on certain transactions (such as online donations), provide a flat percentage fee per transaction regardless of the donation amount, and even give charities their own merchant account with lower fees.

In other words: charity credit card processors may give charity organizations discounted rates for being a recognized 501(c)3 nonprofit, which means more of the money you donate reaches your charity’s cause.

Determining charity credit card processing costs

Several factors determine charity credit card processing costs

These factors include the charity’s size (i.e., whether they’re a large or small charity), the estimated amount of annual transitions the charity expects to receive digitally, and what type of services a charity offers–among other things.

In particular, charity credit card processing fees are usually less for charity organizations that have large operating budgets, because they’re able to negotiate better rates.

How much of the donation amount reaches those in need?

As mentioned above, charity credit card processing fees vary depending on the type of charity and how often you donate. 

However, it’s important to note that these charity credit card processing fees do not go directly to the cause or charity organization itself–they’re simply a fee charged by the company providing the services. 

In other words: charity credit card processors aren’t the charity organizations themselves.

To illustrate, charity credit cards can charge up to three percent of each transaction for charity credit card processing fees–this amount is deducted from the final donation that goes towards their cause or organization. 

For example, if you make a $100 donation to a charity with a 3% charity credit card processing fee associated with it, only $97 of that final amount will reach the charity. Charity credit card processing fees are also charged on monthly donations, where they work similarly to one-time transactions. 

It can also be helpful to remember that processing fees typically do not account for the administrative and marketing costs of a charity. 

Taxes, applicable charges, or fees

Some charity credit card processors may not charge a charity organization for processing fees, but these companies will still pass on the cost of taxes and other applicable charges onto your final donation amount. 

For instance: if you make a $100 donation to charity through charity credit cards (in a situation where there is not a charity credit card processing fee), this doesn’t necessarily mean that 100 percent of this money will go towards charity. Depending on where you live, taxes and other applicable charges can range from three to seven percent–meaning that only $93 to $97 of your donation could end up going toward charity itself.

Why is there a difference between processing fees versus administrative costs?

It’s important to note that charity credit card processing fees are different from administrative costs and the percentage of a charity organization’s operating budget going towards overhead.

In other words: charity credit card processing is just one part of what charity organizations do with their money–it doesn’t include how much they pay in employee salaries, office space rental fees, charity equipment, and other costs that contribute to the day-to-day running of the charity. 

Maximize donation amounts and minimize charity credit card processing fees

If you’re looking to donate to charity and want the full amount of your donation to go towards charity, we suggest using a credit card that offers charity incentives

These charity credit cards generally provide the lowest charity processing fees, so your donation goes towards charity itself–not charity credit card processing fees.

Online Payment Companies - Overview, Online Payment Process

Processors with the lowest additional charges

If you want to donate over the phone or online, charity credit card processors that have low rates and minimal additional charges can be a great option. 

These charity credit cards can help reduce administrative costs for charity organizations by providing benefits like lower processing fees, no monthly minimums/maximums, free equipment/software updates, dedicated customer service representatives for your organization, and more.

The processors below are just a few examples:


PayPal is often the first choice of nonprofits wanting to accept online donations–and for good reason!

In addition to charity credit card processing fees and associated costs, they also provide a free website donation form that can be customized to match your organization or charity’s needs. 

PayPal has been around for over 20 years, so it’s not only reliable but trusted by millions of consumers worldwide.

Dharma Merchant Service 

Dharma Merchant Service offers charity credit card processing rates that are lower than most charity organization’s operating costs. 

They also provide free equipment and software updates, dedicated customer service representatives for your charity, low monthly minimums/maximums, and more!

National Processing

Not only does National Processing offer combative non-profit discount rates, but they also donate a portion of their own revenue to charity! 

They also provide charity organizations with a low monthly fee of $10 per month and no early termination fee. 

Improve your sustainability by picking the right green credit card

With the right credit card, you can donate and feel good about it. 

If sustainability is important to you, you might want to consider the Aspiration Zero–a green credit card that can support your journey to carbon neutral. 

In addition to planting a tree on your behalf for every swipe, this card will help to ensure that more of your donation reaches the causes you care most about.

Interested in the Aspiration Zero? Apply now to get started today!

Leave a Comment

Your email address will not be published.