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However you choose to operate or whatever your current legal status as an organization, you'll need to be transparent about that when attempting to use a donation platform. All have requirements, beginning of course with an account into which donations may be funneled.
Donation processing services will generally require your organization to conform to whatever rules may be applicable to your group's situation and status. If your group is just getting started, you'll likely be an unincorporated organization and you'll have certain filing requirements, like a fictitious name registration, before a bank will even allow you to open an account.
Donation platforms that allow informal groups to participate also have identity verification requirements designed to prevent unscrupulous operators and con artists from exploiting the system.
Some groups handle the startup phase (and perhaps longer) by securing a fiscal sponsor, or what is also called a fiduciary home. A fiscal sponsor, as defined by the Trust for Conservation Innovation, is "a nonprofit organization that provides fiduciary oversight, financial management, and other administrative services to help build the capacity of charitable projects."
If you want to stay strictly nonpartisan and have donations to your group be tax deductible for the donor, you'll want to find a 501(c)3 fiduciary home. Establishing such a relationship with an existing nonprofit allows you to solicit tax deductible donations before you have established your group's own formal tax status. A good explanation for groups intending to function under tax exempt 501(c)3 rules is available from the National Council of Nonprofits.
If your group wants to be explicitly political or partisan, you must proactively tell donors that their donations are NOT tax deductible. In such cases, there may be a 501(c)4 that could serve as your group's fiduciary home. As mentioned above, such relationships bring more than tax advantages. They also bring bookkeeping and accounting rigor, and that permits you to assure donors that their money is being handled properly.
For the record, there are other alternatives. You can, if you see a benefit and have the resources, seek status under U.S. political donation laws, as a PAC, SuperPAC, or some other creature of state or federal law. But these options will seldom be practical starting points for most grassroots groups.
Overview of Financial & Communication Services
The businesses and nonprofits described below do a wide variety of things, but they are all financial and communications service providers available to pro-democracy groups wanting to raise and spend funds effectively and properly. They often provide donation page templates, the hosting of donation pages, donation solicitation tools, list management, and donation processing services including accounting and reporting. Fundraising-related communication tools and services are offered for many specific types of real and virtual fundraisers and fundraising processes, including text-to-donate, special events management, and fundraising campaign analytics. Some also provide crowdfunding platforms.
Additional communications services they sometimes provide include emailing services, mobile messaging, hosting volunteer signup and newsletter signup forms, and providing tools for launching and managing petitions, letter and calling campaigns, and mass mobilizations.
Most are very affordable for start-up projects, and some provide limited packages free for small grassroots groups. Before listing service providers below, a short list of articles surveying "the Best" of these tools are just below.
The 13 Best Fundraising Sites for Individuals & Nonprofits
Crowdfunding Websites | 45+ Favorite Platforms for 2021
Online Donation Platforms | What to Know & 12 Top Picks
List of Top 21 Online Nonprofit Fundraising Platforms for Charities in USA
12 of the Best Fundraising Sites for Nonprofits and Individuals
12 Best WordPress Donation and Fundraising Plugins (2022)
Which Online Fundraising Platform Is Best For Your Nonprofit?
Donation, Fundraising & Messaging Services
GiveWP – Donation Plugin and Fundraising
Crowdfunding & Personal Fundraising
The difference between donation solicitation and processing service providers and crowdfunding platforms can be a bit murky. Google defines crowdfunding as "the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet." This could describe at least some of the offerings of many of the providers listed above on this page. In general, however, most crowdfunding platforms are used by individuals and smaller projects, they have generally lower fees, and the requirements to participate are often lower (less vetting).
A sampling of some of the better-known crowdfunding platforms follows. You will notice that many of these are scarcely distinguishable from the service providers identified above, and they provide many of the same services.
Published: October 2021
Revised: June 2023
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