All Checks, No Balance: A Report on the State of Check Payments to Nonprofits

Why do nonprofits still get so many paper checks from grantmakers? 

Overview

Sending paper checks in the mail should be a payment method of last resort for nonprofit donations. It’s slow, manual and high-risk for fraud. Yet billions of dollars and millions of donations are still sent this way every year. Some of the biggest check-sending culprits are large donor advised fund (DAF) providers, foundations & financial institutions. Part of the reason  they still send checks is the cost of managing an electronic payments program (details in Section 2), but also because checks remain a preference for their grantees! 

Many nonprofits actually demand check payments, making it more difficult for grantmakers to adopt digital payment systems. If they still have to send some of their grants as checks, they’d rather manage only one process. 

As “offline” giving methods like DAFs, Qualified Charitable Distributions (QCDs), workplace giving and crowdfunding platforms (collectively referred to as “Payers” in this report) continue scaling dramatically, these payment challenges are getting exponentially worse. In this report, we cover the issues with check payments, what the sector can do to address this growing risk and what nonprofits can do to receive more digital payments in the future.

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1. The Problem(s) with Checks

Many people have a special place in their heart for paper checks. Holding a donation in your hands makes someone’s support feel tangible. Opening envelopes while anticipating how big a check might be inside is thrilling for fundraisers. Beyond the warm fuzzies and nostalgia, there’s also operational considerations to adding electronic payments (as explained in Section 3), but none of this outweighs the harm that paper checks present to nonprofit fundraising efforts at large.

Risk of Lost Funds

Sending checks through the mail presents a host of risks to those funds. Envelopes can get lost or intercepted, and with the advent of AI, scammers can easily doctor checks for deposit into their own bank accounts. Once the funds are deposited, there’s very little that can be done to reclaim those funds. Adding fuel to the fire - receiving organizations typically don’t even know the payment is coming, especially for offline gifts like DAFs, QCDs, etc., so they can’t report when it’s missing. The source of funds - a donor or Payer - will only ever see the check has been cashed, unaware of whether the money actually reached the organization. 

These risks are heightened for nonprofits as “payees” because their mailing addresses are public, and people know they are a prime destination for mailed checks, which makes them an obvious, lucrative target.   

Because these losses are likely “unknown,” most nonprofits don’t feel this risk as acutely as they should. They don’t know what they lost if they never knew it was coming! It takes a prudent risk mindset to heed the warnings on mail fraud, even when every notable authority on the topic - from the AARP to the U.S. Postal Service - is advising the public to stop sending paper checks in the mail.

According to the Federal Reserve, there were 682,276 reported instances of Check Fraud in 2024, up from 350,000 in 2021. That’s nearly two thousand checks stolen per day - and that’s only what actually gets reported!

Risk of Delays     

Even if checks aren’t outright stolen in the mail, they are subject to many sources of delay: 

• Time to print, stuff and physically send mail 

• Back ups or delays with the Postal Service

• Possibility of delivery to the wrong address

• Potential to be lost en route  

• Delays in processing by the receiver 

If these delays are substantial enough (60-90 days), checks often need to be voided and reissued, starting the cycle over again.  

We ran an analysis of DAF gift delivery time on one nonprofit organization that received over 2,000 DAFpay gifts from 34 different DAF Providers over a 6 month period in 2025. Given the donations were made via DAFpay, we were able to measure delivery time from the point of grant initiation until actual payment delivery. 

The fastest 3 providers - Pledger Charitable, The Donors Fund and Fidelity Charitable - all delivered payment via ACH within 1-2 days of grant approval, on average. Conversely, the 18 providers that sent payment as physical checks had average delivery times of anywhere from 7 to 162 days.

Nonprofit fundraisers all know the experience of hunting down a check that seems to have been lost in the mail or misplaced – but that only happens if they know to expect it! The majority of organizations have no idea when offline check payments are coming to them, and as a result, are losing months’ worth of work that those funds could have been used for. 

Waste  

The stakes of waste are especially high for payments in philanthropy because any additional cost incurred in sending and receiving donations reduces the bottom line of impact. Unfortunately, the check process introduces several new layers of cost:

1. Financial waste: Industry estimates for the all-in cost (i.e., materials, postage, labor) of sending check payments ranges from $4-20 per check. With millions of gifts delivered this way every year, it’s safe to assume that hundreds of millions of dollars are wasted on check issuance each year. 

2. Material waste: Think of all the paper involved with the checks, letters and envelopes used for millions of offline donations – all being thrown away. According to the EPA, paper products make up the largest percentage of all municipal solid waste (23.1%). 

3. Environmental waste: Mailed checks lead to an estimated ~20g of CO2 emissions in transportation and handling, according to a Pitney Bowes study. 

This waste is anathema to many of the nonprofit missions these donors are seeking to support in the first place, like the National Parks Foundation or Environmental Defense Fund.  

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2. Why Nonprofits Prefer Checks

Reason #1: Bandwidth

“Checks work. Changing feels hard.”

Even if checks come with the risk of loss, theft, and delays, shifting processes takes real effort — especially for understaffed finance or development teams.

Nonprofits have to:

• Vet digital options

• Update internal workflows

• Train staff

• Coordinate between finance + development/advancement teams

…which often feels like just “one more thing.” Meanwhile, as mentioned above, the risk of checks still feels abstract. Since many of these gifts are unexpected, nonprofits often don’t even realize when one gets lost.

Reason #2: Workflow Overload

“If we’re processing some checks, we might as well process all checks.”

Not every Payer offers digital payment options. And even when they do, it’s not always a smooth process. Funds arrive in their bank account, but have to be reconciled with gift details that arrive separately. Portals need to be managed to accept gifts and transfer data. And those processes to manage digital payments differ for every payer. Yes, checks are typically manual, but the process is consistent from one Payer to the next. 

If a team already has to open physical mail, scan checks, and key in data for some gifts, it can feel simpler to just stick to the same workflow across all Payers. It’s not efficient, but it’s consistent. And consistency wins when teams are stretched thin.

Reason #3: Digital Doesn’t Mean Simple

“Reconciliation gets messy fast.”

Digital payments may sound easier, but for nonprofits, they often introduce more work.

But ACH transfers usually arrive with no gift data attached to them. Then, the details come separately — in an email, a PDF, a portal login, a CSV, or (worst of all) a monthly batch with thousands of line items. Some portals even require manual approval of every single gift. Suddenly, checks start to feel like the simpler option.

Reason #4: Fraud Concerns 

“Sharing bank information feels risky.”

Some nonprofits hesitate to send sensitive ACH details through email, onboarding forms, or unsecured portals. Even if the actual risk is lower, it feels risky. Checks, which feel familiar and tangible, seem safer — even though they’re actually more vulnerable.

Reason #5: Internal Accounting

“One Account / Routing number doesn’t match our structure.”

Many large nonprofits — think universities, hospitals, multi-department organizations — operate multiple units under a single EIN.

A check can be physically delivered to the right department. An ACH usually lands in one central bank account, creating extra internal work to sort out where the money belongs.

For these organizations, checks equate to control.

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3. Why Payers Still Send Checks 

Because the real risks of checks are poorly understood or appreciated, and so many nonprofits still opt for mailed checks when given the choice, many Payers are left with difficult decisions and default to check payments. Their exact reasoning is typically a combination of the following:

Reason #1: Minimizing Workflows

Even if a Payer pursues electronic payments, some nonprofits won’t enroll, and they’ll be forced to still send paper checks as a fallback. No matter how much more efficient the electronic payment workflow is, Payers will never eliminate check-sending and the baseline overhead expenses that come with managing a check-sending operation. Even the largest national DAFs have struggled to get their ACH rates much higher than 50% of their payments. As a result, many Payers find it more operationally efficient to only manage one workflow and decide to stick with just checks.

Reason #2: ACH Isn’t Always Easy 

While checks present a host of operational headaches – time delay, risk of stolen or lost payments, handling returns, etc. – handling electronic payments “in-house” has its own challenges too:

• New work: Collecting bank details from every grantee - especially when new ones are getting added to a Payer’s list every week - is no easy feat. While physical addresses are publicly available, obtaining updated account & routing numbers is a highly-manual workflow.

• Leaky bucket: Bank details aren’t static. Many organizations change banks often and don’t update their information with Payers, resulting in failed ACHs and the need to hunt down updated data. 

• Risk exposure: Handling the collection and verification of bank details exposes a Payer to entirely new risks. Information needs to be collected & stored securely, and the details need to be verified through a compliance process. AI makes it easy to trick these processes, with doctored bank letters or proof of identification. 

Reason #3: Digital Payments Alternatives Don’t Fit Their Unique Needs 

Many Payers have tried to utilize third-party digital payments providers and have either been frustrated by the experience, or heard horror stories from their peers. The most common points of frustration are: 

• Customer Service: Payers find it hard to engage with the providers because of slow response times.  

• Stagnant Technology: Improvement cycles are long, and product feedback is not actioned upon quickly. 

• Grantee Experience: Nonprofit grantees are often confused by the signup process, have to take many extra steps and still find gift data difficult to reconcile with the fund transfers. 

• Nonprofits are Not a Focus: These providers don’t specifically focus on nonprofits as their core business, so their solution isn’t “purpose-built,” and their incentives aren’t aligned to ensure that nonprofits have the best possible experience.

• Not Holistic: If these providers can’t also handle check payments, the Payer is right back at Reason #1, still managing a workflow in-house that they couldn’t outsource. Even if they can handle checks, their success rates of increasing the percentage of electronic payments is typically underwhelming because of the reasons above.

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4. How To Reduce Check Payments 

While most everyone can agree that the persistence of checks as a primary payment method to nonprofits is not where we want to be in 2026, solving the problem is quite complex. There’s no way for any one party - or even one “side” of the market - to address it on their own. However, if both nonprofits and Payers begin to address what is in their control, we can make meaningful progress.

Action Items for Nonprofits

The most important step in increasing the adoption of electronic payments by nonprofits is increasing awareness around the risks of mailed check payments and opportunities with increased digital adoption (covered in Section 1). However, even for organizations that want more digital payments, it is still not straightforward to make it happen. 

Even for Payers that offer an electronic option, it’s not always clear exactly how to enroll or what the process is for receiving the funds AND gift details after signing up. Here are a few recommended steps that any nonprofit can action today: 

1. Review last year’s donations to establish your most common sources of mailed check payments. 

2. Research those Payers to explore available alternatives to mailed checks. 

   - Ask peer organizations where they’ve enrolled in electronic payments to add to your list of relevant payers with a digital option.

   - Sign up for electronic payments wherever available. 

Note: Chariot offers electronic payments* to eligible nonprofits on behalf of a fast growing list of Grantmakers (Daffy, TIFIN Give, Groundswell, Dallas Jewish Community Foundation, Founders Pledge).

Get on Chariot

Action Items for DAFs (and other Payers)

Even with all the hurdles described in section 3 that slow many DAFs (and other Payers) down from adopting digital payments, many are coming to the same conclusion: the risks of a large-scale check sending operation are materially worse than the downsides of the alternatives.

As moving off of check payments becomes a more common strategic priority for more Payers, there are many steps they can take to collectively help accelerate adoption and streamline the sector’s digital transition. 

Step 1: Clarify the Process  

No matter what approach is taken to send electronic payments, Payers should make it as easy and clear as possible to enroll. That means public announcements about the transition, easy-to-find information on their website about enrollment and ongoing communications to their nonprofit audience. 

Step 2: Ask for Feedback

Nonprofits should be proactively engaged to provide feedback on receiving grant payments – and listened to. When grantees have a better experience, they’re likely to share it and encourage their peers to also adopt digital payments. 

Step 3: Provide Guidelines

Payers should provide grantees as much guidance as possible on how to properly account for their gifts – especially if they have their own bespoke process of grant payments, data structure or gift types. Any Processing Guidelines go a long way to improve grantee experience, allowing them to steward donors better and ultimately have more impact with their mission. Plus, clearer instructions lead to fewer inbound questions for Payers to handle. 

Step 4: Address Digital Challenges 

Payers should have a gameplan for the known challenges of electronic grant payments described in Section 4. Review all available options and plan the transition accordingly. 

Step 5: Coordinate  

By and large, every Payer experiences all of the challenges described in this report, and all address them on their own, separately. There’s so much opportunity for better coordination, shared solutions and standardization. 

One new option introduced in 2025 is the Chariot Disbursements platform, a solution that’s purpose-built for nonprofits. All types of Payers utilize Chariot alongside their existing technology to holistically outsource grant payment execution and deliver safer, faster disbursements that are easier for everyone to deal with.

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5. Open Items for the Future 

Even with all these guidelines and suggestions, there are still more problems we’ll need to solve together – and be mindful of further exacerbating as folks work toward eradicating checks together. Some of the biggest opportunities that the Chariot team is focused on with our partners are: 

Awareness & Education  

It will take a collective effort from all corners of the nonprofit industry to ensure that everyone fully understands the risks and true costs of check payments. Chariot will be doing our best to raise the profile of this issue, but we can’t do it alone.  

Technical Capacity 

Many nonprofits are lean teams, with staff or volunteers who aren’t proficient in handling digital payments. More training on how to handle electronic payments effectively will go a long way. 

Portal Proliferation 

The single biggest risk to the adoption of digital payments by more Payers is a proliferation of unique portals, data structures and processes that encumber nonprofit operations. There will be an increasingly important need for Payers to standardize how grant payments are sent and for nonprofits to efficiently corral data from disparate sources of offline gifts.