Payment Processing Fees for Nonprofits: What You Should Actually Pay
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Every online donation has a cost to move it from your donor's card to your bank account. Payment processing fees for nonprofits are unavoidable, but they are not all equal, and many organizations pay more than they need to simply because nobody applied for a discount.
Are there reduced fees for processing charitable donations online? Yes. Stripe and PayPal both offer nonprofit rates, but you generally have to apply and have your account recognized as a nonprofit before the lower rate applies. The rest of this guide shows how, and how to check what you are paying now.
As engineers, our team at Orthoplex likes to understand exactly where money goes. This guide explains how processing fees work, what charity discounts are available, how to work out your real cost, and practical ways to keep more of every gift.
What payment processing fees for nonprofits actually are
A processing fee is what the payment provider charges to handle a transaction. It usually has two parts: a percentage of the gift and a small fixed amount per transaction. The fixed part is why a $5 gift costs proportionally more to process than a $500 gift.
Several things can change the rate you pay:
- Card type. Some cards, such as premium or corporate cards, cost more to process.
- International cards. Gifts from donors in other countries often carry an extra percentage.
- Currency conversion. Converting between currencies can add a further fee.
- Payment method. Bank payments are often cheaper than cards.
Processing fees are separate from platform fees charged by your software. If you are not sure what you are paying, compare your deposits with your processor's published rate. Any difference is going somewhere else.
Are there reduced fees for processing charitable donations online?
Yes. Payment processors such as Stripe and PayPal offer discounted rates to registered nonprofits, but the discount usually has to be requested and approved. It is not applied automatically.
The major processors offer reduced rates for eligible charities. They are rarely applied automatically.
Stripe offers discounted processing for eligible nonprofits in the US, Canada, and several other countries. According to Stripe's nonprofit discount page, you need valid nonprofit registration, and at least 80% of your Stripe volume must come from tax-deductible donations. Membership fees, ticket sales, registration fees, tuition, and auction payments do not count toward that 80%. You request the discount by contacting Stripe support with your account details and documentation.
PayPal offers a confirmed charity rate. As of September 2026, PayPal Canada's fee page lists domestic charity transactions at 1.60% plus a fixed fee ($0.30 CAD for Canadian dollars), and PayPal US lists confirmed 501(c)(3) transactions at 1.99% plus $0.49 USD. These rates require an application and approval, and they can change, so always confirm the current numbers directly with PayPal.
One thing to watch: if a large share of your volume is event tickets or memberships, you may not qualify for some discounts. In that case, it can make sense to process donations and ticket sales separately.
Work out your effective rate
The simplest way to understand your real cost is your effective rate:
- Take one month of online donations.
- Add up all processing fees charged for that month.
- Divide the fees by the total donations.
If your effective rate is noticeably higher than your processor's published charity rate, look for the cause: international cards, currency conversion, a missing discount, or a platform fee bundled into the number.
A worked example: small gifts vs. monthly gifts
Here is an illustration using a made-up processor rate of 2% plus $0.30 per transaction.
| Giving pattern | Total given | Transactions | Processing cost | Share of gifts |
|---|---|---|---|---|
| Twelve $10 one-time gifts | $120 | 12 | $6.00 | 5.0% |
| One $120 gift | $120 | 1 | $2.70 | 2.3% |
The fixed fee is why small, frequent card gifts are more expensive to process. It does not mean you should discourage small gifts. It does mean that encouraging slightly larger monthly gifts, or offering bank-based payments where available, can make a real difference over a year.
Six ways to lower what you pay
- Apply for your charity rate with every processor you use.
- Let donors cover the fee. Many donors are happy to add the processing cost when asked clearly and without pressure.
- Encourage recurring and larger gifts. Our post on turning one-time donors into monthly sustainers has ideas.
- Offer bank-based options where your processor supports them.
- Separate donations from ticket sales if it helps you qualify for a donation-based discount.
- Review your statements every quarter.
Questions to ask your processor
- Is our organization receiving your charity or nonprofit rate?
- What do international cards and currency conversion cost us?
- How often are payouts made, and are fees deducted before or after?
- What does a refund or disputed payment cost?
- Which payment methods can we offer donors, and at what rate?
Reconciling payouts with donations
Processors usually deposit money in batches, after fees, which can make your bank deposits hard to match to individual gifts. A simple monthly routine helps:
- Export the month's donations from your donor system.
- Export the month's payouts and fees from your processor.
- Confirm that total donations minus total fees equals total payouts.
- Investigate any gap: refunds, disputed payments, or gifts recorded in the wrong month.
Doing this monthly keeps your year-end receipts, your books, and your bank account in agreement.
Why we let you keep your own processor
When we designed DonorsBase, one decision was easy: we would not lock nonprofits into our own payment system. Over the years, we had seen organizations stuck with a processor they did not choose, unable to use the discount they had negotiated or the bank relationship they already had.
DonorsBase connects to Stripe, PayPal, and Authorize.net. Between them, these cover cards, ACH bank transfers, Apple Pay, Google Pay, Venmo, eCheck, and more. You keep your own account, your own rates, and your own relationship with the processor. We take 0% on top.
Donors can also choose to cover processing fees at checkout, which DonorsBase makes easy to switch on. And if your donors in Canada prefer Interac e-Transfer, see our guide to tracking Interac e-Transfer donations.
The bottom line
Processing fees are part of accepting donations online, but you have more control than you might think. Apply for the charity rate, give donors the option to cover costs, understand your effective rate, and make sure your software is not adding a second percentage on top.
Want help reviewing your setup? Contact our team and we will walk through it with you.
Frequently asked questions
Do nonprofits pay lower credit card processing fees?
Often, yes. Stripe and PayPal both offer reduced rates for eligible charities, but you usually need to apply.
What is a good effective processing rate for a nonprofit?
It depends on your processor, card mix, and donors' locations. Compare your effective rate with your processor's published charity rate to spot problems.
Should donors pay the processing fee?
Giving donors the option works well for many organizations. Keep it optional and explain it clearly.
Does DonorsBase charge a processing fee?
No. Your processor charges its own rate. DonorsBase takes 0% of donations.
Are there reduced fees for processing charitable donations online?
Yes. Processors such as Stripe and PayPal offer discounted rates to registered nonprofits, but you usually have to apply and be approved. Ask your donation platform whether the discount passes through to you.
Can nonprofits access discounted payment processing?
Yes. Apply to the processor with proof of your nonprofit status, and confirm that your donation platform lets you keep your own processor account and its discounted rate.