Automating nonprofit payment processing with API integrations

Exploring how businesses and charities can improve efficiency and scalability in donation distribution.

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Nonprofit payment processing can often be a time-consuming and error-prone task. As a result, businesses and charities increasingly rely on technology to help streamline their operations and enhance opportunities. A 2024 nonprofit trends report found manual processes to be a key internal issue for charities. As nonprofits work predominantly with smaller workforces, any automation in the process can be key to growth and success.

Donation collection and distribution represent a significant part of the operational workload for most nonprofits, as they rely heavily on donations as a source of income. A 2021 survey by the Irish Charities Regulator found that donations were the sole source of income for 10.6% of registered charities in Ireland, and accounted for 44% of the total income for the 15 ‘very large’ charities. As such, payment processing for nonprofits is a key consideration when discussing operational efficiency. With a cost-effective and widely accessible payment method in place, charities can broaden their reach to individuals who are willing and able to donate, while also reducing costs and minimising internal manual work.

This article explores how automating donation distribution can support more efficient, accurate, and scalable nonprofit payment processing, benefiting both charities and the organisations that support them.

Challenges in donation distribution

So, what is the key challenge in the process for these organisations? Nonprofits often rely on time-consuming manual methods to distribute donations, ranging from spreadsheets to physical cash handling. These processes not only require significant staff resources but also increase the risk of human error, duplication, and delays. In many cases, there’s no centralised system to track distributions, making reporting and reconciliation difficult.

This becomes especially problematic when dealing with high volumes of payments or multiple recipients. For example, an organisation may need to distribute funds to dozens of partners or local branches on a regular basis. Without automated nonprofit payment processing, each transaction must be initiated manually, adding unnecessary complexity and slowing down disbursements.

Over time, this limited efficiency and delayed access to critical cash flow can hinder an organisation’s ability to scale. When distribution processes are limited by manual capacity, nonprofits may struggle to manage increased donations or expand their partner network. Growth becomes tied to headcount, rather than supported by scalable infrastructure.

Timely and transparent payouts are also essential to maintaining trust with both donors and partners. Delays, errors, or a lack of clarity around payment status can create friction and damage reputations. For organisations that act as intermediaries – such as fundraising platforms or donation processors – clear and efficient payment flows are central to delivering a strong partner experience.

Boosting efficiency and transparency through automation

Automation can significantly enhance the efficiency of nonprofit organisations, reducing costs and improving service delivery while playing a crucial role in nonprofit payment processing. Once set up, automation completely removes the administrative burden associated with manual processes. It enables faster payments to suppliers and partners, reduces the risk of errors in reconciliation, and ensures nonprofits can provide clear, real-time records of how donations are allocated. This not only eliminates the need for time-consuming manual tasks but also builds trust with donors. When donors can see exactly how their contributions are being used, they are more likely to donate again and in larger volumes. Transparency fosters donor confidence, creating a strong foundation for ongoing support.

Using APIs to enhance nonprofit payment processing at scale

While the word ‘automation’ may refer to a variety of technologies, API reachable accounts play a key role in automating donation distribution for nonprofits. A payment API acts as the ‘bridge’ between a nonprofit’s bank account, suppliers, donors, and other necessary parties. By leveraging APIs, nonprofits can tailor their payment solutions to meet specific needs, such as splitting payments based on predefined rules or managing Gift Aid collection and disbursement, all without manual intervention. This level of customisation ensures that the process aligns with the unique operational requirements of each organisation.

In addition to customisation, APIs offer the significant advantage of real-time processing. With an API in place, nonprofits can execute and track payments instantly, providing transparency and accuracy for both internal teams and donors. This real-time capability ensures that all payments are recorded and managed efficiently, reducing the risk of errors and improving trust with stakeholders.

As nonprofits grow and transaction volumes increase, APIs seamlessly scale to meet demand. Whether handling a small or large volume of transactions, the API adjusts without requiring additional resources or manual input. This scalability allows nonprofits to manage larger amounts of donations and distributions efficiently, without being constrained by manual systems or increasing workloads.

The GoodBox case study: A success story

The Fire Payments API enables nonprofits to manage payment processing seamlessly and at scale. A strong example is our work with GoodBox, a UK-based digital fundraising company that processes millions in digital donations.

GoodBox previously relied on a manual payout solution provided by a high-street bank. While functional, the system was outdated and no longer met the automation standards expected of a growing digital business. When the solution was discontinued, GoodBox needed a more robust, scalable alternative to support its expanding operations, and Fire stepped in to help.

Today, GoodBox is fully integrated with the Fire Payments API to automatically disburse funds to over 3,000 charities once bulk donations settle daily into their Fire account. With more than 10,000 contactless donation boxes across the UK and Ireland, this represents a significant volume of transactions. As a result, the company achieved an 800% reduction in manual hours, a 25% decrease in payment errors, and a 25% increase in customer satisfaction.

Read the full case study to learn more about how we support GoodBox.

The future of automation in nonprofit payment processing

While automation is already a powerful tool in nonprofit payment processing, the future could offer even greater potential. Machine learning models, for example, could be applied to analytical tasks, such as analysing historical donor data to determine how future payments might be allocated based on specific donor attributes. The increasing adoption of SEPA Instant across the EU enables real-time euro payments, improving access to funds and reducing cash flow delays. Meanwhile, the growth of open banking is paving the way for more secure, account-to-account donation methods that can lower transaction costs and improve transparency. Additionally, the emergence of commercial Variable Recurring Payments (cVRPs) offers a promising future for nonprofits by supporting more flexible, permissioned recurring donation models, potentially replacing traditional direct debits with safer, user-controlled alternatives.

Fire’s accounts and payments API helps nonprofits streamline donation distribution through seamless API integrations, fast settlement times, and reliable support. Whether you’re managing high volumes of donations or looking to reduce manual workload, our solution is designed to support your growth. To learn how Fire can help your organisation improve efficiency and transparency in payment processing, contact our team at sales@fire.com for tailored support.