Fundraising has always been a challenge to non-profit or not for profit organizations. How much do we require? Where can we find donors? Why isn’t enough coming in? In the current times, the pandemic has crippled economies and businesses globally, compounding the difficulties that these organizations face.
It would be natural to assume that with world-wide financial instability, donations would plunge as well. However, data shows that the pandemic spurred a surge in gifts from donor-advised funds, and 66% of young adults polled trust non-profits to do the right thing during the pandemic.
“Not all revenue streams for charities are declining. CanadaHelps data shows that giving through their platform was growing 21% faster than normal.”
– Imagine Canada
This insight galvanizes the need for non-profit organizations to provide easy accessibility to the options for donor spending. One of the best ways to do that is to improve their websites and optimize them to provide platforms that facilitate online donations.
A robust website with an efficient online platform to facilitate one-time or recurring donations, fundraising campaigns, as well as peer to peer (P2P) campaigns, will boost donor confidence and encourage giving to the non-profit organization.
Non-profit organizations have two options when it comes to modes of receiving donations online
They can optimize their own website to be able to accept donation transactions ( i.e. self-hosting) or link their donation to a third party donation tool, which processes the payment.
- Self-hosted donation pages on the non-profit’s own website allow for unlimited customization and help to build trust with donors while keeping them engaged with the organization’s website content as well. This has the potential to build a loyal visitor base to improve the chances of recurrent donations.
- Third-party platforms provide the convenience of handling all the nitty-gritty of financial transactions for the non-profit organization.
It’s very important to have a powerful and efficient online donation system if a non-profit organization wants to get the most out of online fundraising. As part of that system, Payment processing platforms, in addition to collecting online donations, are also used to collect membership fees, sell merchandise or event tickets online, all of which help with various fundraising initiatives.
The advantages are :
- Donor information is collected and stored safely with reduced risk of a security breach.
- Retain donors with a secure platform that builds trust.
- Builds up a donor database.
However, processing fees can quickly add up for organizations that depend on donations to fulfill their missions. Since it may not be possible to receive online donations without using payment gateways, these fees have always been considered a necessary evil.
The fees that non-profits need to pay may include PCI (Payment Card Industry) compliance fees, Annual / monthly service fees, and Statement and reporting fees.
In addition, there are fees that are charged per transaction, which occur each time a donor makes an online contribution. They are usually a percentage (2.5-3%) of the amount donated. These fees are also known as interchange reimbursement fees, and they are the largest payment-processing-related expense that non-profits should have to pay.
Being aware of the various costs associated with having a payment processor is an important part of cost evaluation for a non-profit organization’s operational budget. The fee structure that makes organizations liable to pay companies for processing online transactions may add up in monthly statements, making the allocation of resources difficult.
This makes platforms that offer zero processing fees an added advantage for non-profit organizations, especially when they offer customizable options to their client websites, to match their themes and demonstrate a cohesive, smoothly transitioned online experience.
Here are the 3 ways a Zero Processing Fee platform greatly benefits a nonprofit organization
1. Donor sentiments
Many donors aren’t aware that there are fees associated with processing their donations, and most donors want their money to be used in the best way possible. By making their supporters aware of the fact that their organization does not have to pay processing fees, donors will be more ready to make payments through the online portal, believing that their contribution is able to go further towards the cause that they care about.
2. Reduction in Costs
Processing fees add up and could cost the organization a large proportion of its donations, thereby adding to its overheads, leaving the lesser funds to use towards their activities. Over time, organizations may be faced with cutting back on its core programs because there is less donation money available to support them. Operational budgets will differ depending on expenses that need to be paid to external agencies in order to keep internal processes running. A lean approach to overhead spending can improve the monetary allowance kept for more fruitful and expansive ideas for the organization to pursue.
3. Efficient Allocation of Funds
Zero processing fees help the non-profit organization to effectively diversify its portfolio and provide value-added services to its mission profile.
Payment processing platforms need to be user- friendly, in order to avoid driving away potential donors. Leaders of non-profit organizations also need to identify platforms with robust customer support services with reliable and trustworthy processing systems to minimize downtimes and increase productivity online.
While picking an online donation tool with a payment processor, choosing between in-built or third party options, non-profit organizations need to consider the common fees and cost associated with payment processing, keeping in mind flat fees, incidental costs, and per-transaction fees. The ability to reduce these expenses makes the organization more able to invest in activities focussed on its mission or cause, which carries forward to the benefactors in the community at large.