A nonprofit organization is one that has received tax-exempt status from the Internal Revenue Service (IRS), usually because it provides a public service or supports a social cause. This type of company refrains from earning profits for its owners and instead donates all income (beyond operational expenses) to whatever cause it champions.
But, that doesn’t mean nonprofits don’t need their own credit card. Like any other business, nonprofit organizations could benefit from having a dedicated small business credit card they can use to keep business purchases separate and simplify expenses for tax-time. Not only that, but they can use a nonprofit credit card as a line of credit when cash flow is tight.
Beyond these benefits, nonprofit organizations can also use a business rewards credit card to earn cash back while gaining access to important consumer protections.
How to choose the right credit card for your nonprofit
By and large, nonprofits don’t need the same personal perks or benefits you get with business credit cards that charge an annual fee, so nonprofits don’t want to pay one if they don’t have to.
Fortunately, an array of nonprofit credit cards don’t charge an annual fee at all, and the best credit cards for nonprofit organizations still offer generous rewards.
Factors to consider when picking a nonprofit credit card
To find the right nonprofit credit card, you’ll want to compare options with no annual fee and a robust rewards program. Also, keep an eye out for business credit cards that offer consumer protections that could help your business. Examples include purchase protection against damage or theft or extended warranties on eligible items that come with a manufacturer’s warranty.
Also, think of the categories your business spends the most in. As you compare the top credit card offers, you’ll notice that some credit cards for nonprofits offer considerably more rewards in certain categories and that you can use this to your nonprofit’s advantage.
Finally, consider how you can redeem the rewards you earn with your nonprofit card. Ideally, you’ll find a card that lets you cash in your rewards for charitable donations or for cash back you can funnel back into your nonprofit.
Best credit cards for nonprofits
The best credit cards for nonprofits are ones with plenty of perks and no hidden fees. The four cards that made Bankrate’s ranking are highlighted below.
Ink Business Cash® Credit Card: Best for large nonprofits
The Ink Business Cash® Credit Card is ideal for nonprofit organizations that have plenty of office space and a lot of bills as a result. This business credit card lets you earn 5 percent back on the first $25,000 in combined spending at office supply stores and on Internet, cable and phone services each account anniversary year (1 percent thereafter), as well as 2 percent back on $25,000 in combined spending at gas stations and restaurants each account anniversary year (1 percent thereafter). You’ll also earn 1 percent back on all other purchases you make, and you get the chance to earn $750 in bonus cash back when you spend $7,500 within the first three months of account opening.
You won’t pay an annual fee, and you can save money with 0 percent intro APR on purchases for 12 months, followed by a variable APR of 15.49 percent to 21.49 percent. Major cardholder benefits for nonprofits include fraud protection, free employee cards, purchase protection, extended warranties and auto rental collision damage waiver when you rent a car for business purposes.
Ink Business Unlimited® Credit Card: Best for simplicity
The Ink Business Unlimited® Credit Card is a good option for nonprofits that want to earn flat-rate rewards on all their business spending. No annual fee is charged, yet you can earn a flat 1.5 percent cash back on all purchases you make. An initial sign-up bonus of $750 bonus cash back is also offered if you sign up and spend $7,500 on your card within the first three months of account opening.
This business credit card also extends a 0 percent intro APR on purchases for 12 months, followed by a variable APR of 15.49 percent to 21.49 percent. You also get free employee cards, purchase protection, extended warranties, auto rental collision damage waiver when you rent a car for business purposes, roadside assistance and other perks.
The Blue Business® Plus Credit Card from American Express: Best for flexible rewards
The Blue Business® Plus Credit Card from American Express is interesting because it lets you earn points in the American Express Membership Rewards program without an annual fee. This means that, once you rack up a stash of rewards, you can redeem points for gift cards, merchandise, travel through AmexTravel.com and even transfers to American Express airline and hotel partners.
Once you sign up, your nonprofit can earn 2X points on the first $50,000 you spend each year, followed by 1X points. There’s no annual fee, and you also qualify for 0 percent intro APR on purchases for 12 months, followed by a variable APR of 15.49 percent to 23.49 percent.
American Express Blue Business Cash™ Card: Best for flat-rate rewards
The American Express Blue Business Cash™ Card works similarly to the “Plus” version, except that it offers cash back instead of Amex Membership Rewards points.
This card lets you earn 2 percent back on the first $50,000 you spend on eligible purchases each year, after which you’ll earn 1 percent back. There’s no annual fee, and you’ll get the same 0 percent intro APR on purchases for 12 months from account opening, followed by a variable APR of 15.49 percent to 23.49 percent.
How to accept credit card donations as a nonprofit
If you want to raise money for your nonprofit, you’ll also have to think about credit cards from an entirely different angle. By setting up a system that lets you accept donations made with a credit card, you can make giving to your cause more convenient and make it easier to raise money online.
Fortunately, accepting donations online only requires a little legwork. First and foremost, you’ll want to find a payment processor you can use that works well in the donation space. Typically, this includes a processor that works with your nonprofit’s CRM or even an online donation tool.
Things to keep in mind about accepting credit card donations
Payment processors that make online donations a breeze include options like Stripe and PayPal, whereas actual donation tools include options like DonorBox, iDonate and Fundly. Where payment processors simply offer a platform for people to donate, donation tools tend to offer more features like landing pages and the option to create events.
Either type of platform can be a good option, but you’ll want to watch out for fees involved with payment processors or donation tools. As an example, PayPal charges 2.2 percent, plus $.30 per transaction just to accept donations on your behalf. However, donation tools tend to be even more costly since they come with more features. For example, iDonate charges a plan fee of at least $199 and a flat 2 percent fee on donations you bring in.
The bottom line
The best credit card for nonprofits can vary depending on how your organization spends and the cardholder features you could benefit from. With that being said, you’ll likely want to focus on cash back credit cards for business, as well as those without an annual fee.
No matter what, make sure to compare all the top business credit cards on the market today before you decide.