Venmo And Your Nonprofit! (Compliance and operational headaches)

Daniel Grunstein, the CEO at Crowded, a platform that specializes in helping nonprofits manage their finances and simplify complex financial processes for volunteers and small NPO’s, joins the cohosts to discuss the use of digital payment systems, particularly focusing on Venmo, within the nonprofit sector.

The conversation digs deep into the challenges and risks associated with using Venmo for nonprofit activities. Daniel emphasizes that while Venmo is designed for casual peer-to-peer payments, it is increasingly being used by nonprofits, which can lead to compliance issues, operational headaches, and donor data tracking challenges. Daniel offers "Nonprofit treasuries have to deal with a wide array of financial processes for what is typically a volunteer position. They often spend money on administration and consulting, which could be streamlined into a user-friendly digital experience to benefit grassroots nonprofits."

One significant risk discussed is the lack of integration and centralization of donor data, making it difficult for nonprofits to maintain compliance and track donations effectively. Daniel suggests that smaller nonprofits should consider end-to-end solutions like Crowded to streamline their financial operations.

The lively chat also touches on how younger demographics are more inclined to use Venmo for fundraising efforts and that it's prevalent in ad hoc fundraising environments such as bake sales or raffle sales.

Watch and learn the importance of proper financial management tools for nonprofits, especially as they navigate the complexities of digital payment systems like Venmo, and the need to centralize and track donor data for compliance and efficiency.

You can also listen to the show on your favorite podcast channel. Additionally, the American Nonprofit Academy provides news, inspiration, and training for the nonprofit and social impact community.

00:00:00 introduction to digital payments topic
00:03:20 Crowded's mission to support nonprofit treasurers
00:04:33 What Venmo is and how it’s commonly used
00:06:54 Venmo’s evolving IRS reporting requirements for nonprofits
00:08:42 Risks of using individual Venmo accounts for donations
00:09:48 Venmo for Business and its limitations for nonprofits
00:15:00 Donations via personal accounts aren't tax-deductible
00:16:13 Why Venmo lacks basic nonprofit tracking tools
00:17:55 Venmo’s failure to integrate donor data effectively
00:18:33 What are the better digital payment solutions for nonprofits?
00:20:13 Why small and large chapter-based nonprofits need integrated tools
00:23:37 Venmo is most common among younger donors and casual fundraising
00:26:39 Reflections on evolving payment processes in the sector



#fundraising #nonprofit #socialimpact #TheNonprofitShow