Not all payment processors are created equal. Cash App for nonprofits is a common consideration, but will it work for yours?
Staying informed is the best way to make a strong organizational decision. This complete guide has your back.
Below, you'll learn:
- What is Cash App for nonprofits?
- How to accept Cash App donations
- Benefits, limitations, and user reviews
- Processing fees and potential costs
- Tips and pitfalls to avoid
What is Cash App?
Cash App is an online payment processing platform from the makers of Square. The app supports peer-to-peer money exchange and focuses on a mobile experience.
Cash App’s social component feels similar to Venmo for nonprofits. Users create $cashtags that link to a shareable URL that may look something like https://cash.app/$yourchosencashtag.
Here are some ways 55 million monthly users lean on Cash App:
- Sending and receiving money, Bitcoin, or stocks with anyone, anywhere
- Generating QR codes for others to scan and complete payments
- Using a physical Cash Card for in-person purchases
Can Nonprofits use Cash App?
There’s an appeal to use Cash App for nonprofits who want to simply collect donations. QR codes, Cash Cards, and mobile apps can offer modern giving options, but may not offer the same experience of a strong donation website.
The features and limitations below can help you decide what's best for your unique organization.
What are Cash App’s fees for nonprofits?
Cash App for nonprofits uses the same pricing as other business accounts. There is no special pricing for 501(c)(3) organizations.
Processing fees include:
- 2.75% per transaction made using a credit card
- Free deposits
- Additional fees for in-person POS tools
Important note: Some credit card issuers categorize Cash App transactions as cash advances. Those charges are often subject to higher interest rates.
Should nonprofits open business accounts to accept Cash App donations?
Upgrading to a free business account is ideal for nonprofits to accept a large volume of Cash App donations with instant deposits. Personal accounts limit transactions to $1,000 on a rolling 30-day period.
Cash App for Business also helps you organize annual donations to report to the IRS. The platform does not, however, issue tax-compliant receipts to donors regardless of whether you choose a personal or business account.
Zeffy offers nonprofits automated and compliant nonprofit tax receipts for every donation.
How to accept donations using Cash App?
Below, you’ll see how to get started on Cash App for nonprofits with a personal account, then transfer it to a business account to accept donations.
1. Download Cash App to your phone or tablet
Download the Cash App to begin the process. You must begin in the mobile application but can access your account on a desktop once it's established.
2. Create an account
Cash App requires you to start with a personal account and later convert it to a business account.
Follow these steps within the Cash App application:
- Enter your phone number or email address
- Cash App sends you a code through text or email
- Enter the code to verify your information
- Choose your $cashtag to create your unique donation link
- Enter your zip code
3. Link a bank account
You'll want to choose a bank account that will only be used for fundraising activity to simplify reporting. The account you choose will be where you can access Cash App donations.
4. Convert to a Cash for Business account
Making the switch to a Cash for Business account is free.
Follow these steps:
- Click on the profile icon located in the top-right of the home screen
- Select Edit Profile
- Click on Switch to a Business Account at the bottom of the page
- You’ll be prompted for information about your nonprofit to verify
- You’ll see a green building icon to confirm your business profile is ready to use
Benefits of using Cash App to collect donations (pros)
Familiar interface
Cash App for nonprofits gives donors a way to give back that mimics popular apps and reduces the learning curve of a new interface. In 2023, 1 in 6 American consumers use Cash App at least once a month.
As donors become savvy about scanning QR codes and searching for $cashtags, it's easier to donate.
Fraud protection
Cash App has encryption and fraud detection to help secure donations and donor data.
Cash App also provides several payment verification options:
- Donors can enable a Security Lock setting that requires a passcode, Touch ID, or Face ID to make a purchase.
- Donors can opt into text or email notifications following every transaction
Instant deposits
Cash App for Business gives nonprofits instant deposits without fees. That means you see donations and funding faster in your bank account instead of the standard 1-3 business days.
What are Cash app limitations and considerations for Nonprofits? (cons)
Limited customer service
Cash App for nonprofits may come with challenges when you need support. The platform has a 3.6 out of 5 rating on Capterra for customer service.
Cash App’s website has some support articles, but few mention donations or charitable organizations. Nonprofits have also stated further frustration when they manage to get on the phone with a representative (more on that below).
Zeffy is known for outstanding customer service and a team focused on nonprofit-specific support.
Lack of nonprofit-specific features
Cash App wasn't built for nonprofits, so fundraising outside a donation link is tough.
The platform doesn't consider fundraising needs like:
- Selling event tickets
- Accepting recurring donations
- Collecting membership payments
- Hosting raffles and lotteries
A well-rounded fundraising strategy might require adding nonprofit-specific tools to your tech stack.
Tax receipts are not compliant
The IRS requires charitable organizations to send receipts to donors for every transaction. Cash App doesn't issue tax-compliant receipts like other payment solutions.
Zeffy automatically generates your IRS-ready 501(c)(3) and nonprofit tax receipts.
Not set up to support donor management
Cash App for nonprofits isn't a donor management solution. You can’t view details about donors or segment supporters for meaningful outreach and retention with Cash App alone.
This gap might leave you searching for a separate donor management solution.
Not FDIC insured
Cash App offers banking services, but the Federal Deposit Insurance Corporation (FDIC) does not insure an account. Only those using Cash Cards are covered by FDIC insurance and only up to $250,000.
That means there is no guarantee that nonprofits can access funds if Cash App goes under.
6 tips and pitfalls to avoid when using Cash App for your nonprofit
1. Use a custom $cashtag
You'll want to choose a $cashtag that’s both professional and on-brand. This is how donors can find your nonprofit.
One easy way to choose a $cashtag is to use your social media handles. That way, donors will already be familiar with the username and can reach your donation link faster.
Important note: You'll only be able to change your $cashtag twice, so choosing one that will grow with your nonprofit is essential.
2. Creatively place QR codes
Cash App for nonprofits gives you a QR code that donors can scan from their phones to reach your donation link. You can make the most of QR codes by placing them where your donors already are.
You can place Cash App QR codes in places such as:
- Physical merchandise
- Coffee cups, centerpieces, or on napkins at an event
- Signage or posters
- Business cards
- Direct mailers
- Presentations
“Any guesswork or jumping between apps is taken out of the equation. The sender of funds doesn’t need to rack their brain for their Cash App password, and the receiving party gets their money instantly.” URL Genius
3. Use Cash App for social media engagement
Sharing your Cash App donation link through social media is easy. Make the most of the payment option by ensuring donors know there's an easy way to give on channels they love.
Consider adding your $cashtag or direct link to:
- Profile bios
- In-feed posts
- Stories
4. Plan for the price of fundraising growth
Expanding fundraising beyond simple donation collection with Cash App will come at a cost. You'll need to add Square to Cash App to sell merchandise or accept payments in person at fundraising events.
Square's POS software comes with additional monthly and credit card processing fees.
Learn more by checking out our deep dive on Square for nonprofits.
5. Beware of security risks
Since 2020, nonprofit trust has declined to 56%, the largest year-over-year change of any institution studied. Trust is everything to build loyal donor communities who continue to give.
It’s important to consider Cash App’s 2022 data breach that impacted around 8 million users.
When donor information is compromised, any of the following can feel the impact:
- The advocacy of your mission
- Donation volume
- Community partnerships
- Volunteer work
- Support available for beneficiaries
6. Stay ahead of IRS complications
Tax implications exist if a personal Cash App account is used to receive donations. That means funding from an individual team member or advocate on their account is not a tax-deductible donation.
New IRS requirements will ask Venmo, Cash App, and Zelle to report users who exceed $600 in transactions per year by 2025. The money will be considered personal income instead of donations, which can impact peer-to-peer giving and other fundraising activities.
Consulting a tax professional or an IRS representative can help offer guidance.
Nonprofit user reviews
“Set up CashApp for a non-profit. Worked great for collecting dues and donations. Then my cell phone provider asked me to get a new phone. Same phone number. Downloaded CashApp and could not access the account. Contacted Support. A nightmare experience like that many others describe - delayed responses, a different responder every time, runaround answers.” Charlotte P., nonprofit treasurer review from Trustpilot
“I contacted Cash App due to it crashing mid transaction of sending money to a merchant to benefit a Non Profit Charity Organization. –Cash App told me they had no record of my inquiry–Cash App hopefully will be held accountable for aiding the merchant who did not return my hard earned money.“ Michelle W., Cash App donor from Trustpilot
Is there a better alternative to Cash App for Nonprofits?
Zeffy is a free software alternative to Cash App for nonprofits specifically. In fact, it's the only zero-fee fundraising site built specifically for charitable organizations.
Zeffy offers diversified fundraising tools to grow your mission. You see 100% of your nonprofit donations.
How Zeffy compares to Cash App for Nonprofits
Check out the full comparison.
The bottom line: Cash App for nonprofits
Cash App for nonprofits is a user-friendly way to accept donations online but lacks nonprofit-specific functionality. The platform also has a history of data security risks, high transaction fees, and customer service challenges.
Remember, your nonprofit always has fundraising software options like Zeffy that deliver simplicity with reliable support and robust fundraising options at no cost.
Cash App for nonprofits - FAQ
Does Cash App send donors automatically tax receipts?
No. Cash App does not send automatic tax receipts and payment confirmations are not tax-compliant.
Can a church use Cash App for donations?
Yes. Churches can use Cash App to collect donations from communities. Outside of church donations, organizations cannot collect recurring donations or host events to expand church giving through Cash App.
