What’s The Best Way To Run An Online Fundraiser For Multiple Charities?

Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, also known as Charity Clairity. Today’s question comes from someone who wants to know the best way to run an online fundraiser for multiple charities:  

Dear Charity Clairity,

My son and I want to start a fundraiser for two cancer-related charities. We tried to have an actual fundraiser event but sadly it did not work out. I’d like to now just do an online donation drive. Ideally I’d like to use an app or service to hold the money until we’re ready to donate it directly to the organizations. How can we best achieve this?

— In the Dark

Dear In the Dark

There are several ways to go about this. Your choice somewhat depends upon (1) whether your donors want tax deductions and individual tax receipts, or (2) whether they’re content to simply give regardless of tax deductibility. Let’s look at the pros, cons, compliance considerations, and practical steps for setting up your fundraiser under both scenarios.

1. If your donors care about tax deductions

When donors want or expect tax-deductible receipts, you must route their contributions through a bona fide 501(c)(3) organization, and not through your personal bank account, PayPal, Venmo, or any pooled holding account — unless that account is legally owned by a charity. U.S. law is very specific:

• Only the organization that legally receives the donation can issue the receipt.
• Donations made to individuals are not tax-deductible, even if you later give the money to charity.

You have two strong options here: fiscal sponsorship or charity-hosted fundraising pages.

(1) Fiscal sponsorship: The easiest way to pool tax-deductible donations

If you want to collect donations in one place, tally a total, hold the funds temporarily, and then distribute them to two cancer nonprofits, fiscal sponsorship is the cleanest and most professional approach.

What is fiscal sponsorship?

A fiscal sponsor is an established 501(c)(3) that agrees to accept donations on behalf of a project (in this case, yours). They legally own the funds until they grant them to your chosen nonprofits. Many people think of fiscal sponsors as “nonprofit umbrellas” that extend their tax-exempt status to projects aligned with their mission.

How it works in practice

1. You apply to a sponsor or set up a simple agreement (Memorandum of Understanding).

2. The sponsor creates either:

• A dedicated project account, or
• A simple donation page for your fundraiser.

3. Donors give directly to the sponsor.

4. The sponsor handles receipts, accounting, and holding the funds.

5. When you’re ready, the sponsor grants the pooled funds to the two cancer organizations you’ve selected.

Why fiscal sponsorship works so well for multi-charity fundraisers

• Donors receive tax-deductible receipts right away, with no ambiguity.
• No funds pass through you personally, which avoids tax complications and builds trust.
• You can pool everything and present a unified fundraising total, something donors may appreciate.
• Sponsors are experienced at managing donor-designated gifts, reporting, and compliance.
• Your fundraiser appears more official, which can increase giving.

What it costs

Most fiscal sponsors charge a 5–10% administrative fee. This covers accounting, monitoring, and processing donations. The fee should be part of your written agreement.

Who offers fiscal sponsorship?

• Community foundations
• Nonprofits focused on health or social impact
• Organizations listed in the National Network of Fiscal Sponsors or the Fiscal Sponsor Directory

If you have a nonprofit you already support who you think may fit the bill, it’s a good idea to approach them first and see if they’d be amenable to serving as your sponsor. If you’re already a donor or volunteer there, they may agree to a minimum fee.

(2) Charity-hosted fundraising pages: A simple, direct, low-effort option

If your two chosen cancer-related nonprofits already use modern fundraising platforms, they may create peer-to-peer or team pages for you.

How this works

• Each nonprofit creates a special fundraising page for your campaign.
• You share the links with your community.
• Donors click the page corresponding to the charity they wish to support.
• The charity receives donations directly.
• The charity issues receipts automatically.

Pros

• No admin work for you beyond promotion.
• Donors get automatic receipts.
• You’re not handling money at all, eliminating compliance risks.
• Easy to set up if the nonprofit supports peer-to-peer campaigns.
• Automatic tracking of total raised per page — the platform shows the running total and progress toward goals.

Cons

• You cannot combine totals across two separate fundraising pages automatically; this must be done manually.
• The nonprofits must agree to create the pages—and not all will.

2. If your donors don’t care about tax deductions

If your donor base is small, personal, informal, or simply unconcerned about deductibility, you can gather contributions into a single shared account and later donate the total to the charities of your choice. Transparency is essential to protect trust. Donors must understand their gift is not tax-deductible because they are giving to you, not a charity. You, in turn, pledge to donate the pooled funds to charity.

Saving the pooled funds in a segregated account

Alas, there are no good apps of which I’m aware that will accomplish this for you. A start-up called Braid looked promising, but dissolved in 2023. GoFundMe is an option if you’re raising for a single charity, but will not work if you have multiple beneficiaries.

The only truly compliant option is a segregated personal bank account (or sub-account) dedicated to this purpose. This works for bookkeeping, but the responsibility and risk fall on you. This approach works when:

• Donors personally know and trust you.
• The campaign is small and informal.
• No one expects a tax receipt.
• You are transparent that the money flows through you.

Directly encourage donors to give to the charities on their own

Another low-complexity path is simply to encourage donors to give directly to each charity via each of their official websites.

• You provide donors with the two official donation links.
• Donors receive receipts directly from each organization.
• There are no administrative fees

The only downside is you cannot pool the donations into one gift. And if you care about reporting back to donors regarding how much you collectively raised, the only way to accomplish this is to ask donors to self-report the size of their donation so you can track total giving. Realistically, a lot of your donors will want to keep the size of their donations anonymous.

Which path should you take? A simple guide

If donors want tax deductions:

Best choice: Fiscal sponsorship

• Pools funds
• Keeps everything compliant
• Sponsor issues receipts
• Most professional-looking
• Slight administrative fee

Good Alternative: Charity-hosted fundraising pages

If a charity uses a P2P platform, and you create a personal fundraising page under their umbrella:

• All donations are made directly to the charity
• Donors receive their own tax receipts from the charity
• You get a visible tally of total money raised
• You never touch the funds
• You can easily show your progress toward a goal

If donors don’t need or care about tax deductions:

Best choice: Set up your own segregated bank account.

• Easy to set up
• Lets you pool collected funds so you can report back on the total to your donors
• No tax deduction (true either for donors or you personally, as money collected from others, ethically, is not your charitable gift

Final thoughts

Whether your donors prioritize tax deductions or simply want to support a meaningful cause with no fuss, you can choose a structure that fits the scale, tone, and goals of your fundraiser.

• If your priority is pooling the money and presenting a unified gift, fiscal sponsorship is the most flexible, credible, and compliant option.
• If your priority is simplicity, charity-hosted pages or a segregated bank account may work best.

Hopefully I’ve been able to shine a bit of a light so you’re no longer in the dark.

— Charity Clairity (Please use a pseudonym if you prefer to be anonymous when you submit your own question, like “In the Dark” did.)

Have you run an online fundraiser for multiple charities? Let us know in the comments.