Charitable Giving Trends
July 31st, 2006Charitable Giving Trends
The Advantages of E-Giving
More than four in five Americans continue to say they donated money to a charitable cause or organization last year, according to a Gallup Lifestyle Survey conducted in December 2008. Despite this good news, many groups are being challenged to “do more with less.” Charitable organizations are confronted by constant pressure to maximize contributions and cultivate new donors. At the same time, the current adverse economic landscape translates into increasing demand for nonprofit services.
Electronic payments can address these challenges in a number of ways. E-giving results in increased dollars, not only through additional donations, but also through larger amounts being given. The Kintera/Luth Nonprofit Trend Report found that online contributors gave as much as 50 percent more than those who donated through traditional means.
An online presence for contributions removes geography as a barrier, opening up the opportunity to accept payments from new donors. And because we live in a mobile society, an online contribution portal may strengthen otherwise transient relationships with donors by providing an easy and stable way to remain connected to the organization. Many donors use the Internet to investigate organizations before making a gift.
Forty percent of donors always go online before making a donation, either online or offline, states the Kinterta/ Luth report.
Donors Prefer E-Giving
Contributors like e-giving for several reasons. According to research conducted by The Network for Good, convenience is the number one reason donors say they give online. The number two reason cited was that giving quickly increases during times of crisis. Following an emergency or disaster, there is typically a spike in charitable contributions. E-giving makes it easy for people to donate and feel that they are part of the solution.
Faith-based organizations believe recurring e-giving provides peace of mind for their members, because they can count on a donation being made whether or not they are physically present. It is a convenient way for the faithful to continue to fulfill their commitment even when they are ill, on vacation, or unable to give in person due to inclement weather.
E-giving is in tune with the “green” movement. The reduction of paper is a smart strategy that appeals to the environmentally aware. And in this day and age where privacy and security concerns are mentioned in the news on a daily basis, e-giving offers increased confidentiality.
ACH Offers Savings and Efficiencies
Not-for-profit and faith-based organizations without an Internet presence can still leverage the benefits of electronic payments. Many nonprofits’ online programs represent a fraction of their offline direct mail programs, according to the Convio Online Marketing Nonprofit Benchmark Index™ Study. For groups like these, and for organizations that receive the bulk of their contributions via check, ACH offers impressive cost savings and administrative efficiencies. For example, not-for-profits can utilize ACH payment applications such as BOC and ARC to reduce the time, cost, and labor required to process checks, freeing up important resources that can instead be dedicated to the core mission of the organization.
Stewardship requirements for most not-for-profit organizations include reporting on the percentage per contributed dollar allocated for administrative expenses. Accepting credit card payments for contributions is more costly than ACH payments due to interchange fees which add to administrative costs and reduce the amount available for supporting charitable efforts. ACH is an attractive option for organizations striving to reduce their administrative costs and stretch the value of contributions.
Additionally, ACH can easily be used for recurring donations. Recurring payment functionality makes it easier for donors to give more by spreading the obligation over a period of time. Research reveals contributors that set up recurring donations give more generously. A one-time annual decision usually results in a more generous contribution, as opposed to periodic giving decisions based upon cash on hand. Recurring gifts aid not-forprofits by establishing a reliable revenue stream, making planning and budgeting easier.
A New Era
In this day and age when a cup of coffee is frequently a non-cash purchase, not-for-profit organizations face an imperative to adapt to the preferences of their donors. “The Wired Wealthy” study revealed that 51 percent of wealthy donors prefer to give via the Internet. Another significant catalyst shaping this change is the maturation of the population growing up with the Internet. The median age of contributors at the online Network for Good site is 38, significantly younger than the average 60+ years of age of offline donors. These changes are ushering in a new era where charitable and faith-based organizations must leverage electronic payments technology to effectively serve their constituents and remain strong.
About the Author:
Deborah Matthews, AAP, is Electronic Payments Strategies Director for Jack Henry & Associates/ProfitStars. She also serves as Vice Chair of the NACHA Internet Council (www.nacha.org) and is a frequent contributor to a wide variety of magazines and trade publications. She can be reached at [email protected].
Article Source: ArticlesBase.com – Charitable Organizations Benefit from Online Payments
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