8 pros and cons of Venmo fundraising
Venmo has emerged as one of the most popular platforms for sending and receiving digital funds from friends, family, co-workers, and more. The rapid growth of these peer-to-peer payments has largely been driven by millennials and Gen Zers, who use the mobile platform to split tabs, divide bills, and pay friends back. Some users have even turned the app’s name into a verb, as in, “I’ll Venmo you for those fries right now.”
Now, organizations from nonprofits and school clubs to businesses and political organizers are wondering whether they can use Venmo to supercharge their fundraising strategy. Is Venmo a convenient way to collect donations, sell tickets and merchandise, and reach new audiences? Or is it best left to roommates splitting the gas bill?
We’ve got you covered! Below, we’ll give you a quick overview of how Venmo fundraising works and then dive into the platform’s major pros and cons. Whether you’re raising money for a personal cause or evaluating Venmo for your organization, this article is for you.
Two ways to start fundraising with Venmo
For the average user, signing up for Venmo is straightforward. You download the free app, connect a bank account, credit card, or debit card, and start sending payments and requests. Easy, right? If you’re fundraising, you can go this route, but there’s a better way to add Venmo to your toolkit. Let’s look at both methods below.
Raise money directly through Venmo
Venmo wasn’t built with fundraising or sales transactions in mind, so there are multiple restrictions and risks to just creating a Venmo account and asking your supporters to give. Here’s how Venmo puts it:
“Venmo is designed for payments between friends and people who trust each other. Avoid payments to people you don’t know, especially if it involves a sale for goods and services (like event tickets and Craigslist items). These payments are potentially high risk, and you could lose your money without getting what you paid for. Venmo does not offer buyer or seller protection. Business usage of Venmo requires an application and explicit authorization.”
Also, nonprofit organizations should know that Venmo doesn’t provide support for user-created donation campaigns. The company announced it was running a private beta test for donations, but they’ve closed applications and there haven’t been any updates.
It’s also difficult for Venmo to verify organizations and clamp down on fake profiles across their massive network. In one case, MarketWatch discovered that users had set up unauthorized Venmo accounts for the Red Cross and Planned Parenthood. If donors send funds to the wrong person, there aren’t any built-in payment protections for them or your organization.
Add Venmo as a payment option to your fundraising platform
Most clubs, teams, and organizations will be better off using fundraising software and then enabling Venmo. Typically, all you have to do is create an account, turn on Venmo, and get going. With Givebutter, your organization doesn’t even need to have a Venmo account to accept payments. This method works well for a couple of reasons.
First, your donors can feel certain that they’re really giving to your organization. They’ll go through your fundraising page or website as usual but simply have another payment option. Creating a comfortable, confident giving experience is key to attracting repeat donors. For another layer of credibility, Givebutter adds a verification badge to your profile if your 501(c)(3) is verified by the IRS.
Also, most fundraising platforms have set up official integrations with Venmo or PayPal, its parent company. That means your organization is more likely to have access to customer service and tech help from Venmo. Your fundraising platform will also provide support to figure out any kinks along the way.
Now that we've covered the "how" of Venmo fundraising, use this pros and cons comparison to determine whether it's worth it.
Advantages of Venmo fundraising 👍
Here are four reasons Venmo could be a great addition to your fundraising toolkit.
1. Venmo caters to the growing number of mobile givers
The days of people mailing checks, digging in their bag for cash, or waiting to get to a computer to donate are fading quickly. Now, donors expect giving to be convenient and accessible from their smartphones.
In fact, 50% of all nonprofit website visits came from users on mobile devices in 2019. Those mobile users generated 25% of all revenue. As a free mobile app for iOS and Android devices, Venmo is as mobile-first as it gets. Your supporters will appreciate being able to give on the go.
2. Venmo is blowing up with young donors
Venmo is a one-way ticket to the next generation of donors. Digital payments have become the norm for millennials (born between 1981 and 1996) and Gen Zers (born between 1997 and 2012). A whopping 50% of Venmo users are millennials aged 25 to 34. Offering Venmo as a payment method shows that you’re keeping up with times more than any emoji-filled marketing campaign can.
3. Venmo is an easier ask for you
According to PayPal, most people use Venmo for transactions under $60. Money flies back and forth across Venmo for millions of different purchases each day — pizza deliveries, rent payments, travel costs, house supplies, coffee for two. Inevitably, users have unused funds left in their Venmo account when they’re paid back.
Why does this matter for your organization? When you request a donation, users may feel like they’re simply using up their “Venmo money” rather than breaking out a new $20 or $40. It’s like they’re grabbing spare change for a good cause, and that can make it easier to get a “yes” to donating.
4. Venmo is ready-made for social sharing
Venmo is a two-in-one tool — not only does it simplify payment acceptance, but it doubles as a social media platform. When people complete a transaction, their payment pops up in Venmo’s newsfeed with a comment (if they have public sharing turned on).
This is a unique opportunity to get wide exposure for your cause without lifting a finger. It's also a great way to get the ball rolling on your crowdfunding campaign. You can even give your donors the text (and emojis or GIFs) to copy and paste. For instance, “I just donated to the Fund for Dallas Startups 🚀 #LiftOff” or “Just sponsored art supplies for a Jones Elementary student 🎨. Ask me how!”
Disadvantages of Venmo fundraising 👎
Like any payment service, there are some drawbacks to using Venmo to collect funds.
1. Venmo has transaction amount limits
Venmo limits how much money users can send each week. There are different limits for peer-to-peer payments, purchases with the Venmo Debit Card, purchases from businesses, and so on. As of November 2020, the weekly transaction limit is $4,999.99 for person-to-person payments and $6,999.99 for payments to authorized businesses.
Even if your donors aren’t making gifts this large, they could run into this limit as the week’s spending adds up. No organization wants to lose out on funding because their donors send too much money.
How Givebutter helps 💸 : Fundraising best practice is to give your donors multiple methods so they don’t run into roadblocks. You can accept everything with a Givebutter account — all major credit cards, PayPal, Google Pay, Apple Pay, cash, and checks.
2. Venmo doesn’t have a recurring giving option
Recurring givers are some of the most sought after groups because they stick around. The retention rate for monthly nonprofit donors is 90%, while the retention rate for the average donor is just 43%. That means that organizations lose about half of their one-time donors each year but keep nearly all their monthly donors.
There’s no way to set up a recurring donation in Venmo, whether it’s $10 per month or $500 per year. This forces your organization to ask for larger one-time gifts.
How Givebutter helps ⏰ : You can offer a recurring donation option for Venmo, PayPal, and credit cards in any of your campaigns, events, or donation pages. Cool, right? Choose between monthly, quarterly, or annually.
3. Venmo can’t send tax receipts
Do you run a tax-exempt organization? Depending on the donation amount, you may be required to send your donors a tax receipt for each transaction. Unfortunately, for Venmo fundraising, there’s no way to email your supporters a receipt or obtain contact information to mail receipts by hand. That’s an automatic deal-breaker for fundraisers.
How Givebutter helps 🙏 : Our platform automatically issues a receipt and thank-you note after every donation, sale, or ticket purchase, including your Venmo transactions. Woohoo!
4. Venmo doesn’t integrate with your CRM
Customer relationship management (CRM) software lets organizations manage their contacts and keep their donor and volunteer relationships strong. Most donation platforms integrate with CRMs, so that donor information (name, email, phone number, donation amount, etc.) is transferred to your database when they hit the sign-up or donate button. This isn’t the case with Venmo donations. You’ll have to set aside time to collect information and manually enter data into your CRM.
How Givebutter helps 🌴 : You can connect your account with a variety of top-notch CRMs like Bloomerang and Salesforce and say goodbye to hours of data entry.
Get the best of both worlds
Venmo has revolutionized the way we send and receive money, and it could open up new fundraising opportunities for your organization.
As a payment method, it’s easy to use, popular with young adults, ready-made for small transactions, and social media-friendly.
As an online donation tool, however, Venmo shines the most when a fundraising platform supports it. That way, you can provide multiple payment methods from one central hub and get must-have features like recurring gifts, tax receipts, and integrations.
Ready to get started? Create your free Givebutter account today.