American nonprofit organizations derive nearly 70% of their annual income from individual charitable donations. Government and foundation grants, bequests, and corporate donations represent the balance, according to the Giving USA Foundation. Securing funding across these segments demands unified systems to accept grants, donations, membership, and tithe payment contributions safely.
Online giving platforms help streamline multichannel funding processes and deliver payment methods proven to increase donor retention and contribution levels. For example, electronic funds transfer (EFT) capabilities enable nonprofits to offer convenient Automated Clearing House (ACH) payments, direct bank-to-bank funds transfer, remote deposit capture (RDC), eCheck, and credit card payment options online.
Increase Donations and Encourage Ongoing Giving with More Available Payment Options
A Nacha study found that U.S. donation frequency and contribution levels rose when donors used online ACH or credit card payment portals to make donations.
ACH donors averaged more than double the annual revenue and donation frequency than donors using other payment types. As a convenience to sustained donors that contributed 67% of corporate donations, ACH and credit/debit card accessibility across custom solutions was crucial. Online multichannel payment processing enables nonprofit organizations to do the following effectively:
Securely Process Online Donations
A global giving trends report confirmed more than half of international donors prefer to donate online using a credit/debit card or direct ACH transfer. An online payments system allows nonprofits, churches, and charitable organizations to safely accept electronic payments and reduce fraud risks associated with paper methods. Payment information is encrypted and tokenized when a payment gateway transfers funds from payer to payee financial institutions.
Sell Tickets and Merchandise
While charitable donations are the primary funding source for nonprofits, merchandise and fundraising event ticket sales generate substantial revenue and support for mission-driven philanthropic goals. Supporters wearing or displaying their support promote organizational awareness.
A secure payment gateway with API and eCommerce plugin capabilities permits donors to make direct payments to charities for merchandise and tickets without being redirected to a third-party site, encouraging donors to complete transactions.
Collect Membership Fees or Dues
Online payments simplify one-time and recurring payments for nonprofit trade associations and organizations that rely on membership dues and fees, capturing contributions that might otherwise be lost due to enrollment or renewal issues. With recurring payments, members can make installments throughout the year, offering an incentive to join when recruiting new members.
Protect Your Nonprofit from Fraudulent Activity
Nonprofits must ensure that they do not store sensitive donor information in an onsite system or lose it in the shuffle as they receive checks, money orders, and paperwork.
Automated systems encrypt, process, and store data using a secure server and provide real-time account authentication to help prevent fraud and data exposure. Gateway analytics tools provide valuable insights into the organization’s financial health to inform board member decisions, supported by data, that benefit the organization.
Integrated Payment Gateway for Nonprofit Donations
An integrated payment gateway allows even smaller nonprofits without a web presence access to a generic payment portal link for hosting social media, email, and SMS text-to-donate funding campaigns. Campaign codes can link online and other funding venues for a cohesive user experience.
Industry-compliant payment portal providers do not require the nonprofit to have a website. Instead, they can configure portals to match the brand images. Portals can also mirror an existing website and enable donate button activation. Powerful add-on features for increasing donor participation and managing funding activities across all channels are important considerations when selecting a payment gateway provider.
Choosing the Right Payment Gateway Providers
When partnering with an online payments provider, ask the following questions: Is the interface user-friendly? Complex interfaces repel visitors and their support. What types of payments are supported? Card, eCheck, and ACH payments are the most popular.
Does the processor offer a mobile app with solid security features? Apps are an excellent payment and communications channel for nonprofits. Ensure the gateway provider universally supports authentication, data encryption, tokenization, and fraud protection.
Finally, what additional features and functions does the platform support? SMS text-to-donate capabilities can tap donors and keep them actively engaged. Campaign codes can be used in multiple locations to host social media campaigns and online events appealing to larger audiences. Drop-down capabilities can segment donations and events, and recurring payments encourage sustained giving.
In some cases, passing a fee to donors automatically or as an opt-in can reduce processing costs, and robust reporting and dashboard features help track funding and reporting for donor tax purposes.
As donor preferences shift to secure online and mobile platforms that offer convenient payment options, nonprofits making these shifts realize the benefits of ACH processing, such as increased donation frequency and dollar volumes, less donor churn, lower processing costs, and new revenue channels. For the best results, work with a Nacha Preferred Partner who is Payment Card Industry Data Security Standard (PCI DSS) Level 1 certified, such as iCG Pay, formerly known as iCheckGateway.com.
Our industry-compliant, simple-to-navigate system supports multiple donation campaigns in one secure platform easing administrative duties and increasing charitable contributions for nonprofit organizations.
Contact iCG Pay today to learn more about the benefits of ACH payment processing for nonprofits.
Date Originally Published: November 30, 2020
Date Updated: January 24, 2024