To accept donations on your website, you need to sort out four things in order: whether the money is a tax-deductible charitable gift or a personal gift, the accounts and identifiers required to receive funds legally, a payment processor that fits your volume, and the receipt and reporting practices that keep you compliant after the money starts arriving. The rules diverge sharply depending on whether you’re a registered 501(c)(3) or an individual raising money for a personal cause, so that question comes first.
Deductible Charitable Gifts or Personal Gifts?
Under federal law, only contributions to organizations described in IRC Section 170(c) qualify as deductible charitable contributions. That list covers 501(c)(3) nonprofits organized for religious, charitable, scientific, literary, or educational purposes, along with certain veterans’ organizations, volunteer fire companies, and government entities accepting gifts for public purposes.1Internal Revenue Service. Charitable Contribution Deductions If your organization doesn’t hold 501(c)(3) status, you cannot tell donors their gifts are tax-deductible. Saying so anyway exposes you to penalties and exposes them to disallowed deductions on audit.
If you’re an individual raising money through a personal website or crowdfunding page, the money people send you is generally treated as a gift under federal tax law, not a charitable contribution. Gifts received by an individual are not taxable income to the recipient. The person sending the money could owe federal gift tax if their total gifts to you in a single year exceed $19,000, the 2026 annual gift tax exclusion.2Internal Revenue Service. What’s New — Estate and Gift Tax In practice the gift tax rarely applies because it comes out of the giver’s lifetime exemption, but donors should understand the distinction.
Individuals collecting funds through PayPal, Venmo, GoFundMe, or a similar platform should also expect a Form 1099-K if total payments exceed $20,000 and the number of transactions exceeds 200 in a calendar year.3Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill — Dollar Limit Reverts to $20,000 Receiving a 1099-K doesn’t automatically mean you owe tax on the amount, because personal gifts aren’t income, but it does mean you’ll need to account for the reported amount on your return and explain why it isn’t taxable. Keep clear records of who sent what and why.
Accounts and Identifiers You Need First
Every organization accepting donations online needs a Federal Employer Identification Number. You apply using IRS Form SS-4, and U.S. applicants can get one immediately online through the IRS website.4Internal Revenue Service. Instructions for Form SS-4 The nine-digit EIN identifies your organization for tax filings, bank accounts, and payment processor applications. Sole proprietors can sometimes use a Social Security Number instead, but any entity that wants to keep personal and organizational finances separate should get the EIN.
Open a dedicated bank account in the organization’s name before you collect anything. Mixing donations with personal funds invites legal trouble during audits and makes reporting far harder. Banks typically ask for your EIN, formation documents, and any ownership agreements.5U.S. Small Business Administration. Open a Business Bank Account Nonprofits should bring the IRS determination letter confirming 501(c)(3) status, since many banks offer fee waivers or special account types for tax-exempt organizations.
Any site handling credit card transactions must also comply with the Payment Card Industry Data Security Standard. If you use a third-party processor like Stripe or PayPal, the processor handles most of the technical burden, but you still need to confirm your own compliance level. For most small organizations that means completing an annual Self-Assessment Questionnaire certifying that your website and systems handle cardholder data securely. Your processor can tell you which questionnaire applies to your setup.
State Charitable Solicitation Registration
About 40 states require charities to register before soliciting donations from their residents, and a publicly accessible donate button can count as soliciting in every one of them.6Internal Revenue Service. Charitable Solicitation — Initial State Registration If someone in Ohio can see your donation page and give money, Ohio may consider you to be soliciting there.
Non-binding guidelines from state charity officials suggest that if you’re based in a state with a registration law, you must register there, and if you’re based elsewhere you generally need to register once you start receiving donations from a state on a repeated or substantial basis. Not every state follows those guidelines, and some define “solicitation” broadly enough that a single donate link could trigger the requirement.
Initial registration fees vary widely. Some states charge nothing; others charge several hundred dollars, often on a sliding scale tied to annual revenue. Annual renewals add ongoing costs, and most states require you to file a copy of your Form 990 as part of the renewal. Soliciting without proper registration can result in administrative fines, cease-and-desist orders, or in serious cases criminal penalties. Any nonprofit planning a national online fundraising campaign should budget for multi-state registration or use a compliance service that handles it.
Choosing a Payment Processor
You have two basic options: a dedicated merchant account through a bank or payment company, or a third-party aggregator like Stripe or PayPal. The right choice depends on transaction volume and technical comfort.
Merchant Accounts vs. Aggregators
A dedicated merchant account gives you a direct relationship with a processor and can offer lower per-transaction rates at higher volumes. Wells Fargo, for example, charges 3.50% plus $0.15 per online transaction at the lowest tier, dropping to 3.30% plus $0.15 once monthly volume exceeds $80,000.7Wells Fargo. Payment Processing Pricing Some providers charge monthly maintenance fees on top of per-transaction costs; others don’t. The tradeoff is more paperwork and a longer approval process.
Third-party aggregators are faster to get running. You can usually start accepting donations within a day or two, and they charge a flat percentage per transaction with no monthly fee. Stripe offers discounted processing fees for qualifying 501(c)(3) nonprofits that use their accounts primarily for donations.8Stripe. Fee Discount for Nonprofit Organizations Standard aggregator fees for nonprofits generally fall in the 2% to 3% range plus a fixed per-transaction charge. On $100,000 in annual donations, the difference between 2.2% and 2.9% is $700.
Mobile Wallets
Offering Apple Pay or Google Pay on your donation page reduces friction for mobile users. Apple requires a separate approval process for nonprofits that want to use the “Donate with Apple Pay” button, including enrollment in the Apple Developer Program and verification of your organization’s eligibility.9Apple Developer. Apple Pay for Donations Your processor needs to support these wallet types, and most major aggregators do.
Fraud and Chargebacks
Donation pages are frequent targets for stolen credit card testing. A fraudster makes a series of small donations to verify that a stolen card number works, then uses the card for larger purchases elsewhere. You absorb the chargeback fees every time the real cardholder disputes those transactions.
The most effective defense is 3D Secure authentication, which adds a verification step between the donor and their card issuer. Visa reports roughly a 45% reduction in fraud on authenticated transactions compared to standard online payments.10Visa. 3D Secure: Your Guide to Safer Transactions Low-risk donations authenticate invisibly in the background; flagged ones prompt the donor for a one-time password or biometric from their bank. Authentication also shifts chargeback liability away from your organization on verified transactions. Basic precautions round out the defense: set a minimum donation amount, enable CAPTCHA on your form, and monitor for repeated small donations from the same IP address in a short window.
Adding the Donation Tool to Your Site
Once you’ve chosen a processor, you’ll generate a code snippet from the provider’s dashboard. The simplest approach is a “Donate” button that redirects the user to a secure payment page hosted by the processor. This takes almost no technical skill: paste the code into your site wherever you want the button. WordPress, Squarespace, and Wix all include a custom code or embed block for exactly this.
A more polished approach uses the processor’s API to build a donation form that stays on your site, keeping the donor in your branded experience throughout. This requires more technical work and sometimes additional software licensing, but it tends to produce higher completion rates because donors aren’t bounced to an unfamiliar page mid-transaction.
Whichever method you use, test it before going live. Every major processor offers a sandbox or test mode that simulates transactions without moving real money. Run at least one test donation through the full cycle: form submission, payment confirmation, receipt delivery, and fund arrival in the bank account. Skip this step and you’ll find out something is broken when a donor tells you, or when the money lands somewhere unexpected.
Recurring Donations
Recurring donations produce predictable revenue and higher lifetime donor value, but they carry specific obligations. Tell donors exactly what they’re signing up for, amount and frequency, before they enter payment information. Send a confirmation immediately after enrollment. Include cancellation instructions in every receipt, and provide an easy online way to cancel: a “Manage Recurring Donation” link, a donor portal, or at minimum an email address that reaches someone who can process the cancellation promptly. For donations that recur less frequently than every six months, send a reminder at least seven days before the next charge. Falling short here can trigger chargeback disputes that cost you both the donation and a penalty fee.
Receipts and Disclosures Donors Need
The $250 Written Acknowledgment
Federal law requires donors to receive a written acknowledgment for any single contribution of $250 or more, and without it, the donor cannot claim a tax deduction regardless of how much they gave.11Office of the Law Revision Counsel. 26 USC 170 – Charitable, Etc., Contributions and Gifts The acknowledgment must include the cash amount (or a description of donated property), your organization’s name, and a statement about whether you provided any goods or services in return. The donor needs this document before filing the tax return for the year of the gift.
Configure your donation platform to email a receipt with all required elements immediately after every qualifying transaction. Receipts aren’t legally required for donations under $250, but sending them anyway is standard practice.
Quid Pro Quo Disclosure Over $75
When a donor gives more than $75 and receives something in return, such as a dinner, event tickets, or a branded item, you must provide a written disclosure that the deductible amount is limited to the contribution minus the fair market value of what you gave back.12Office of the Law Revision Counsel. 26 USC 6115 – Disclosure Related to Quid Pro Quo Contributions The disclosure must include a good-faith estimate of the value of the goods or services. If someone pays $200 for a gala ticket and the dinner is worth $75, the receipt should state that only $125 is deductible.
A narrow exception covers token items. Low-cost articles like stickers, mugs, or tote bags distributed in connection with a fundraising solicitation don’t count as a “benefit” for disclosure purposes as long as they cost your organization $13.90 or less in 2026.13Internal Revenue Service. Revenue Procedure 2025-32 This threshold adjusts annually for inflation. Intangible religious benefits, such as admission to a religious ceremony, also don’t require a value estimate — just a statement that the benefit is intangible and religious in nature.
Annual IRS Filings That Keep Your Status Alive
Tax-exempt organizations must file an annual return with the IRS, and the form depends on your size:
- Form 990-N (e-Postcard) is available to organizations with gross receipts normally $50,000 or less. It’s a short electronic filing with basic identification information.14Internal Revenue Service. Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard)
- Form 990-EZ is for organizations with gross receipts under $200,000 and total assets under $500,000.15Internal Revenue Service. 2025 Instructions for Form 990-EZ
- Form 990 is required when gross receipts reach $200,000 or more, or total assets hit $500,000 or more.
Ignoring these filings is costly. If your organization fails to file its required Form 990, 990-EZ, or 990-N for three consecutive years, the IRS automatically revokes your tax-exempt status.16Internal Revenue Service. Automatic Revocation — How to Have Your Tax-Exempt Status Reinstated Reinstatement requires a new application and, in many cases, a fee. During the gap, donations to your organization are not tax-deductible.
When Donor Benefits Trigger Tax on the Nonprofit
One boundary worth flagging: if your nonprofit provides goods or services in exchange for donations, such as sponsor recognition packages or paid event access, those activities can trigger unrelated business income tax. Distributing low-cost promotional items ($13.90 or less in 2026) as part of a fundraising appeal is excluded, and so are qualified sponsorship payments where the sponsor receives only name or logo acknowledgment rather than advertising. Adding a call to action, pricing, or comparative language to a sponsor mention can cross into advertising and make the payment taxable.17Internal Revenue Service. Publication 598 — Tax on Unrelated Business Income of Exempt Organizations If your donation page offers benefits beyond a simple thank-you, review the specifics with a tax professional before launching.