According to the Federal Reserve’s July 2014 Survey on Consumer Finances, 77 percent of the U.S. population holds at least one credit card. What’s more, a 2010 study conducted by Visa® and the Association of Fundraising Professionals found that 36 percent of donors prefer to donate using credit or debit cards. Also, there has been double-digit growth in the number of donations made via credit and debit cards.
Is your nonprofit getting a piece of this pie? And if not, should accepting credit cards be a top consideration? For some key points to contemplate, including the pros and cons, keep reading.
Credit cards: The good and the bad
Donors love the convenient, automatic nature of credit cards. Plus, they cite the ease of use, safety and security as top reasons for this preference. In addition, accepting credit card donations can create an opportunity for recurring contributions and, according to Visa, a loftier donation, too.
But with the good comes the bad, such as set-up fees, merchant account fees, monthly statement fees and transaction fees, just to name a few. Many nonprofits worry that these fees could eat into their donations, and they wonder if it’s worth it. Here are three steps your nonprofit should consider taking to determine just that.
- Merchant research: There are countless merchant services providers, and they’re all vying for your business. Make sure you do your research first. Consider assembling an internal team to do the legwork. Ask for a list of reputable, credible companies that have an easy set-up process with an acceptable timeline. Short of extenuating circumstances, most processors should be able to get your company up and running within a couple of days. You may also want to consider polling other nonprofits to determine which merchant they use and whether or not they would recommend them.
- Fee exploration: Although you won’t be able to completely avoid fees, you may find a fee range that is more suited to your organization’s expectations. Ask your research team to dig further and provide you with a helpful, side-by-side comparison of the types of fees you may be charged. In addition to the types of charges previously discussed, there are also fees which vary by business (for example, for-profit vs. nonprofit), transaction type (debit vs. credit), customer support, mobile and more. Knowing all the ins and outs can help you make the most informed decision.
- Equipment needs: Lastly, you’ll want your team to determine what equipment will be required, if any. Will you only be processing donations online, via your website? Will you require a point-of-sale system? Have you considered the use of a mobile processing app to bring in donations at fundraising events and galas? These are all things to consider when deciding what equipment you’ll need and how much you’re willing to pay for it.
Once you’ve completed these three key steps and you’re ready to accept donations, be sure you promote your new service. If you’re holding a fundraising event or gala, imprint retractable banners and table giveaways, such as sweet treats or after-dinner mints, with your web address and the phrase “Online gifts now accepted.” If you have a physical location where people may be coming in to give, be sure to let them know credit cards are accepted. Imprint the message “Now accepting credit cards for your convenience” on floor stickers or window decals.
Remember, your donors and supporters will appreciate the ease and convenience of being able to donate via credit card. And accepting this method of payment may just help your organization secure some recurring contributions and heftier donations, too.
“Credit Card Ownership Statistics.” Statistic Brain RSS. N.p., 09 Jul. 2014. Web. Retrieved 14 Oct. 2014.
“Weighing the Online Donation Option.” Afpnet.org. N.p., 12 Oct. 2010. Web. Retrieved 14 Oct. 2014.
Fritz, Joanne. “What Do I Need to Know About Credit Cards for Accepting Donations?” About. N.p., n.d. Web. Retrieved 14 Oct. 2014.
Dick, Jason. “5 Factors to Consider with Merchant Services Selection.” A Small Change. N.p., n.d. Web. Retrieved 14 Oct. 2014.