Credit card processing allows nonprofits to accept donations, auction purchases, event tickets, and other payments by card. The payment processor handles the transaction and sends the funds to the organization, typically charging a processing fee for each payment. Fees vary by provider and account, so nonprofits should compare their actual rates, payout terms, and payment options—not just the advertised price.Choosing a payment processor is about more than finding the lowest percentage. Nonprofits should also consider whether they qualify for nonprofit pricing, how quickly funds are deposited, how refunds and disputes are handled, which payment methods are supported, and how easily transactions can be reconciled with their fundraising software.
When a nonprofit accepts a card payment, the payment processor communicates with the cardholder's bank and card network to authorize the transaction. If the payment is approved, the transaction is recorded and the funds are later paid out to the nonprofit according to the processor's payout schedule.
Nonprofits may use card processing for many types of transactions, including:
For the nonprofit, the process should be relatively simple: the supporter submits a payment, the processor approves or declines it, applicable processing fees are assessed, and the proceeds are deposited according to the organization's payment account settings.
| Question | What nonprofits should know |
|---|---|
| Who charges the processing fee? | The payment processor, such as Stripe or PayPal |
| How are processing fees calculated? | Often as a percentage of the payment plus, in some cases, a fixed transaction charge |
| Are nonprofit rates available? | Sometimes. Eligibility and qualifying transaction types vary by provider |
| Who receives the money? | The nonprofit receives payouts according to its payment processor's account and payout settings |
| Can supporters help cover costs? | Some fundraising systems allow organizations to add a clearly disclosed contribution or other charge, subject to applicable rules |
| Can nonprofits accept cash and checks? | Yes. Many fundraising systems also allow organizations to record offline payments |
| Are software fees the same as processing fees? | No. A fundraising-platform fee and a payment-processing fee are separate charges |
| Does every payment method cost the same? | No. Pricing can vary by provider, transaction type, card, currency, and other factors |
The most useful comparison is not simply which provider advertises the lowest rate. Nonprofits should estimate costs using the types, number, and size of payments they actually expect to receive.
A payment-processing fee is the cost associated with processing an electronic payment.
Depending on the provider and account, the cost may include:
This is why nonprofits should be cautious about budgeting around one generic processing percentage.
Two organizations using the same payment provider may not necessarily have identical costs.
Before estimating net proceeds from donations, tickets, auctions, or other fundraising activity, check the pricing terms attached to your organization's actual processor account.
A percentage-based fee changes with the size of the payment.
A fixed transaction charge applies each time a payment is processed.
That difference matters when a nonprofit receives many small transactions.
For example, ten separate $10 payments may create a different total processing cost than one $100 payment even though both produce $100 in gross revenue.
A simple way to estimate the processing cost of an individual payment is:
Payment amount × applicable percentage + applicable transaction charge = estimated processing cost
Use your organization's actual payment-processing rate when making this calculation.
An example rate from a blog article should never be assumed to be the rate your organization will pay.
Sometimes.
Certain payment providers offer special pricing to eligible nonprofit or charitable organizations, but the requirements vary.
Stripe, for example, offers nonprofit pricing to qualifying organizations under specific eligibility requirements. The transactions that qualify for discounted pricing can also matter.
PayPal also offers charity pricing for eligible and approved organizations.
Nonprofits should not assume that every payment they accept automatically qualifies for a nonprofit rate.
This is particularly important for organizations that accept several types of payments.
A charitable donation may be treated differently from:
Before building a budget around a nonprofit processing rate, ask:
The safest approach is to verify the current pricing directly through your organization's payment-provider account.
Stripe and PayPal are both widely used payment processors. Neither is automatically the best choice for every nonprofit.
Organizations should compare their actual account terms and fundraising needs rather than choosing based on name recognition or one advertised processing rate.
| Consideration | Stripe | PayPal |
|---|---|---|
| Credit and debit card payments | Supported | Supported |
| Nonprofit or charity pricing | Available to qualifying organizations under applicable terms | Available to qualifying and approved charitable organizations |
| International transactions | Pricing may differ | Pricing may differ |
| Payouts | Sent according to the organization's Stripe payout settings | Managed through the organization's PayPal account |
| Refunds and disputes | Managed through Stripe | Managed through PayPal |
| Final processing cost | Depends on account and transaction type | Depends on account and transaction type |
When comparing Stripe and PayPal, consider:
A nonprofit that already uses one processor successfully may have little reason to switch simply because another provider advertises a different standard rate.
This is one of the most important questions to ask when evaluating fundraising software.
The payment processor handles the electronic transaction and pays the organization according to the processor's payout schedule and account settings.
The fundraising platform may provide the donation form, auction checkout, bidder invoice, event registration, or transaction records without being the company that determines the credit-card processing rate.
Before choosing fundraising software, ask:
Those questions often reveal more about the actual payment workflow than simply asking, "What percentage do you charge?"
Sometimes, but nonprofits should understand exactly what type of charge they are adding.
Fundraising systems may use terms such as:
These terms do not necessarily mean the same thing.
A buyer's premium, for example, is an additional amount associated with an auction purchase.
A supporter contribution may be used to help an organization offset fundraising or processing expenses.
A credit-card surcharge specifically relates to payment by credit card and may be subject to payment-provider requirements, card-network rules, disclosure requirements, and applicable laws.
Organizations should therefore verify the requirements that apply before adding a charge specifically because someone is paying by credit card.
Whatever model is used, supporters should be able to understand the charge before completing their payment.
For a broader explanation of platform fees, processing fees, service fees, and buyer's premiums, see our guide to silent auction fees.
Yes.
Electronic payments do not have to be the only option.
Many nonprofits need to accept a combination of:
This is especially common at:
For example, one auction winner may pay online by credit card while another prefers to hand the organization a check.
The important part is making sure each payment can be recorded accurately.
Organizations should establish a consistent procedure for recording offline payments so that invoices, bidder records, item records, receipts, and financial reports remain reconciled.
A refund and a chargeback are not the same thing.
A refund occurs when the organization voluntarily returns some or all of a payment.
A chargeback, also called a payment dispute, occurs when a cardholder challenges a transaction through the card issuer.
Before choosing a payment processor, determine:
Organizations running fundraising events should also establish policies for auction purchases, duplicate payments, canceled events, and disputed transactions before problems occur.
Organizations accepting credit and debit cards should use reputable payment systems designed to handle payment information securely.
The Payment Card Industry Data Security Standard, commonly known as PCI DSS, establishes security requirements for organizations that accept payment cards.
The nonprofit's specific responsibilities depend on how payments are collected and which processors or systems are involved.
Using an established payment processor can reduce the amount of sensitive card information the nonprofit handles directly, but organizations still need good security practices.
These include:
Nonprofits should rely on their payment provider's current security documentation rather than an old checklist or article that may no longer reflect current requirements.
Yes, and this distinction can affect both software fees and payment-processing costs.
A donation is a voluntary contribution to an organization.
An auction payment is a purchase associated with a winning auction bid.
An event ticket represents admission or participation in an event.
Payment providers may have different rules or pricing for different transaction types.
Fundraising platforms may also calculate their own fees differently depending on the type of transaction.
For example, BiddingOwl's current pricing model applies a 5% performance fee to winning online/mobile auction bids.
Traditional silent and live auction tools do not carry that 5% performance fee.
BiddingOwl also does not apply the 5% winning-bid fee to donations, admission tickets, Fund-a-Need contributions, or paddle raises.
Electronic payment-processing charges are separate and are determined by the organization's selected payment provider.
That means nonprofits should calculate two separate costs:
Fundraising-platform cost
and
Payment-processing cost
They are not the same fee.
BiddingOwl allows organizations to connect either Stripe or PayPal for integrated electronic checkout.
The organization chooses which supported payment integration it wants to use, and that payment provider handles the electronic transaction.
The processor—not BiddingOwl—determines the applicable credit-card processing rate.
BiddingOwl also allows organizations to accept payments outside the integrated checkout.
For example, an organization can accept:
The administrator can then open the bidder's invoice and record the payment as received.
This is useful for organizations that want to offer more than one way to pay, particularly during an in-person or hybrid fundraising event.
No.
Under BiddingOwl's current workflow, bidders are not required to save a credit card before placing bids.
After an auction closes, winning bidders can complete checkout using the payment options the organization has configured.
The organization may also collect an offline payment, such as cash or check, and record that payment against the bidder's invoice.
This provides flexibility for organizations that do not want every participant to enter a card before participating.
It also means organizations should establish a clear process for following up on winning invoices that have not yet been paid.
No.
BiddingOwl's platform fee and the payment processor's fee are separate.
For winning online/mobile auction bids, BiddingOwl currently charges a 5% performance fee.
If the winner then pays electronically, Stripe or PayPal may charge a separate payment-processing fee according to the organization's account and applicable terms.
In simple terms:
Winning online/mobile bid → BiddingOwl platform fee may apply
Electronic payment → payment-provider processing fee may apply
These are two different services and two different charges.
For examples showing how platform fees, processing fees, and buyer's premiums affect auction proceeds, see our Silent Auction Fees guide.
Yes.
BiddingOwl allows organizations to accept cash and check payments outside the integrated Stripe or PayPal checkout.
An administrator can open the bidder's invoice and mark the payment as received.
This allows an event to use several payment methods without requiring every supporter to complete the same electronic checkout process.
It is particularly useful for auctions where some guests prefer to pay at an event checkout table or where major donors or sponsors prefer to pay by check.
Start with the organization's actual fundraising activity.
A nonprofit that primarily accepts online donations may have different payment needs from an organization that runs one large annual auction or gala.
Compare providers using questions such as these:
| Question | Why it matters |
|---|---|
| What is our actual processing rate? | The advertised rate may not match the organization's account |
| Do we qualify for nonprofit pricing? | Discounts may have eligibility and transaction-type restrictions |
| What types of payments do we accept? | Donations, auction purchases, tickets, memberships, and merchandise may have different requirements |
| Does the processor integrate with our fundraising software? | Integration can simplify checkout and reconciliation |
| Where are payouts deposited? | The organization needs reliable access to its funds |
| How quickly are payouts made? | Timing may matter when event expenses are due |
| How are refunds handled? | Refund procedures affect supporters and bookkeeping |
| How are disputes handled? | Chargebacks may require quick administrative action |
| Can we also record cash and checks? | Many fundraising events use mixed payment methods |
| What support is available? | Payment problems during a fundraising event can be urgent |
| What reporting is provided? | Finance teams need to reconcile gross payments, fees, refunds, and payouts |
Do not select a payment processor solely because it has the lowest advertised percentage.
The better choice is the processor whose total cost, payment options, payout structure, reporting, support, and integration fit the nonprofit's actual fundraising workflow.
Credit card processing and fundraising-software pricing are separate parts of the cost of accepting online payments.
Nonprofits should:
For nonprofits running auctions and fundraising events, the payment processor with the lowest advertised rate is not always the best operational choice.
Checkout flexibility, payment reconciliation, offline-payment options, reporting, and support can be just as important.
Usually, yes. Electronic card payments generally involve payment-processing costs. Some providers offer nonprofit or charity pricing to qualifying organizations, while other fundraising services may use different business models to offset or subsidize those costs. Organizations should verify the current terms of the specific provider they plan to use.
There is no single processing rate that applies to every nonprofit. Pricing can vary by processor, account, transaction type, card, country, currency, and eligibility for nonprofit pricing. Use your organization's actual payment-provider terms instead of relying on a generic percentage.
Both Stripe and PayPal offer special pricing programs for certain qualifying nonprofit or charitable organizations. Eligibility requirements and qualifying transactions vary, so nonprofits should confirm their current account terms directly with the provider.
No.
A payment-processing fee pays for processing the electronic transaction.
A platform fee pays for fundraising, auction, ticketing, event, or other software.
Some services bundle costs together, while others keep them separate.
Some fundraising systems allow organizations to add a supporter contribution, service fee, buyer's premium, or similar disclosed amount.
A credit-card surcharge is more specific and may be subject to card-network, payment-provider, disclosure, and legal requirements.
Organizations should verify the applicable rules before adding a surcharge specifically tied to credit-card use.
Yes.
Many nonprofit organizations accept a combination of electronic and offline payments.
The important consideration is whether the fundraising system provides a reliable way to record offline payments so invoices, donor records, bidder records, and financial reports remain accurate.
Yes.
BiddingOwl supports integrated checkout using either Stripe or PayPal.
Organizations choose which supported integration they want to connect.
Yes.
Organizations can accept cash or checks outside the integrated payment checkout and record those payments against the bidder's invoice.
No.
Under BiddingOwl's current workflow, bidders do not have to save a payment card before placing bids.
Winning bidders complete payment after the auction using the payment options configured by the organization.
No.
BiddingOwl's 5% performance fee applies to winning online/mobile auction bids.
Donations, admission tickets, Fund-a-Need contributions, and paddle raises are not subject to that winning-bid performance fee.
Payment-provider processing charges may still apply when an electronic payment is processed.
Neither provider is universally better for every nonprofit.
Compare your organization's actual pricing, eligibility for nonprofit rates, transaction types, payout preferences, international-payment needs, refund procedures, reporting, support, and compatibility with your fundraising platform.
Separate the costs into categories:
Then calculate the expected cost using the amount and number of transactions your organization realistically expects to process.
If you are comparing fundraising pricing models rather than payment processors alone, see our BiddingOwl vs. Zeffy comparison.
Payment and pricing information in this guide was reviewed using current official BiddingOwl, Stripe, and PayPal materials in August 2026.
Product features, processing rates, nonprofit eligibility requirements, payment methods, and provider terms can change. Organizations should verify current details directly with their payment provider before budgeting an event or changing their payment setup.
Official resources:
Nina Caldwell brings over a decade of nonprofit fundraising expertise to her role at BiddingOwl, where she helps organizations create meaningful connections between their missions and communities. Her journey began with a local animal shelter’s first online auction and has grown into a career dedicated to making fundraising less overwhelming and more successful for nonprofit leaders.
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