4 ways nonprofits prevent overspending with virtual cards

For nonprofit finance teams, staying on budget isn’t just a best practice: it’s mission-critical. When every dollar is tied to a grant, donor or program, even small spending oversights can ripple across the organization.

And ripple they do. According to the Nonprofit Finance Fund’s 2025 State of the Nonprofit Sector Survey, more than half of nonprofits report having three months or less of cash on hand. Over one-third ended 2024 with an operating deficit, the highest rate in the survey’s 10-year history.

There are a couple of reasons for that. Outdated payment methods like petty cash, shared cards and checks create blind spots around who spent what, which budget the money came from and whether purchases comply with donor guidelines. And manual reimbursements and delayed reporting compound the problem. They create conditions for overspending and make it hard to see where funds are going until it’s too late.

Virtual cards are helping nonprofits change that. They give finance leaders instant control over every purchase, so teams can spend confidently without losing track of donor intent or budget limits.

So what exactly are virtual cards and why are organizations turning to them? Understanding how they work is the first step to seeing how much control they can restore to your budget.

What are virtual cards and how do they work?

Virtual cards are digital payment cards that work like physical ones, except they exist only online. Each card has a unique 16-digit number, expiration date and security code and can be created in seconds through a secure online platform.

A virtual card can be issued to an individual, team or vendor for a specific purpose or time period. Finance leaders can set spend limits, restrict merchant categories or even tie the card to a single vendor. Once the purchase is complete, the card can be paused, replenished or deactivated instantly.

That level of control is what makes virtual cards so powerful for nonprofit financial management. They’re heavily used in the back office for recurring expenses such as software subscriptions, monthly services, vendor payments and event coordination. Nonprofits can issue vendor-specific cards with strict monthly limits, ensuring predictable spend and eliminating the surprise renewals or untracked charges that often cause budgets to drift.

And another bonus: instead of waiting for a physical card to arrive or relying on reimbursements after the fact, finance teams can issue cards instantly to staff or volunteers anywhere. They get full visibility into purchases and added peace of mind knowing each card is protected from fraud and misuse.

In other words, virtual cards make it possible to approve, track and reconcile spending in real time: no manual follow-up or guesswork required.

4 smart ways nonprofits use virtual cards to stay on budget

Virtual cards give nonprofit finance teams what they need most: control. By building clear spending rules directly into the payment process, they help organizations stay accountable to leadership, donors and regulatory bodies. Here are 4 practical methods nonprofits are using them to keep spending on track.

Simplify budget management

Managing budgets across multiple programs or locations can easily result in overspending. Virtual cards simplify that process by letting finance teams allocate funds directly to staff and volunteers, each with pre-set limits. Teams can issue cards instantly, ensuring everyone has the funds they need without relying on shared cards or petty cash.

Virtual cards also help minimize reimbursements by enabling approved purchases upfront, reducing the need for staff to use personal funds. This speeds up operations and reduces administrative workload and reporting errors.

Enforce spend policies automatically

With traditional payment methods, enforcing policies depends on manual oversight and often happens after the fact. Virtual cards make compliance automatic. Finance teams can set rules for where, when and how cards can be used: whitelist or blacklist vendors, restrict merchant categories or block weekend and out-of-policy spend.

These built-in controls prevent unauthorized purchases before they happen. Together with real-time budget limits and adjustable funding, they give nonprofits tighter control over spending at every level from field operations to executive leadership.

Track spending in real time

Overspending often happens because finance teams don’t see transactions until reconciliation. Virtual cards change that by giving organizations instant visibility into every purchase. Each transaction appears in a centralized dashboard mapped by grant, department or program so finance leaders always know how funds are being used. And automated GL-coding and accounting integrations eliminate manual data entry and reconciliation time, freeing staff to focus on mission-driven work.

Control subscription and vendor spending

Recurring expenses are one of the most common causes of unintentional overspending, especially subscriptions, vendor services and event-related purchases. Virtual cards allow nonprofits to assign a dedicated card to each vendor with predefined limits, merchant restrictions and monthly caps. 

If a subscription is no longer needed or a program ends, finance teams can pause or deactivate the card instantly. This prevents surprise charges and keeps recurring costs aligned to grant and program budgets.

How PEX virtual cards streamline nonprofit spend

For nonprofits, every dollar and every decision matters. PEX virtual cards make it easier to manage both by combining control, flexibility and visibility in one simple platform.

1. Control at the card level. Finance teams can issue virtual cards for specific vendors or recurring expenses and set limits that align with budget goals. Each card can be locked to one merchant, capped by month or project and adjusted in seconds, preventing surprise charges and keeping programs on track.
   
2. More flexibility with cash flow. With PEX, nonprofits can use their credit line to pay vendors immediately while preserving cash on hand for up to 30 days. That added breathing room can make all the difference when grant funds are delayed or when projects ramp up faster than expected.
   
3. Every transaction gives back. PEX cards earn 1% back on every qualifying purchase, enabling nonprofits to reinvest savings into their mission. Combined with real-time reporting and automated reconciliation, it’s a smarter, more transparent way to manage organizational spend.

Don’t just take our word for it: ask Family in Christ Community Church. The Colorado-based organization reduced reconciliation time by 93% after switching to PEX, freeing up staff for more mission-focused work. 

They also relied on virtual cards to manage recurring payments and coordinate ministry events by issuing vendor-specific cards with tight controls. This gave leadership predictable spend, fewer surprise renewals and clearer visibility across programs: a powerful example for nonprofits of every size.

Turning financial control into mission impact with PEX virtual cards

When spending is transparent, controlled and easy to manage, finance leaders can focus less on chasing receipts and more on advancing the mission. Virtual cards aren’t just a smarter way to pay, they’re a practical way to strengthen budget accountability and give your team time back for what really matters.

See how PEX can help your organization simplify spend management and stay mission-focused. Request a demo today.