Online nonprofit giving

This is the first article in a series. By Dave Voris, Horizon Bank

In the past several years, donors to nonprofits have become more comfortable with online giving. A new study released by M+R and the Nonprofit Technology Network (NTEN), shows a 14 percent increase in 2013 with nearly $325 million raised through more than 5.5 million gift transactions.

But just a couple of years ago, most credit card donations were made over the phone. And that required the charity to take several additional steps. A staff member would write down the credit card numbers and notes about the donor, then punch that data into a terminal originally designed for card swipes. Now, the staff member captures the information needed for record keeping, authorizes the transaction and emails a receipt to the donor, all from the same computer.

For years, many nonprofit organizations have used their websites as donor-marketing tools. But in recent years many now use them to collect donations.  While most people are familiar with the “shopping cart” used by companies like Amazon for Internet purchases, now there are “shopping carts” for nonprofits. These “carts” allow a nonprofit to sell products or accept specifically earmarked donations. Many nonprofit organizations have no need for a “shopping cart,” but simply want to provide people with an easy and convenient way to make a general donation. 

At first many nonprofits developed complicated structures that involved multiple vendors. As nonprofits begin to take advantages of the new technologies, it is important to keep several things in mind. First, it needs to be easy for the donor and economical for the nonprofit.

When an organization is determining the best use of the technology, the terms gateway and processor are relevant.  Gateway simply refers to where data is captured and processor is how the credit card is authorized and paid. Now, the technology exists to provide both using a single platform. What is critical, however, is that a nonprofit knows how data and donations are captured and reconciled. Using a single platform eliminates and streamlines the final reconciliation process for both.

Second, much like for-profits, nonprofits must pay attention to trends and analyze buyer behavior, determining how their donors are likely to use the technology to develop a system that meets the majority of donors’ needs.

And finally with PCI Compliance requirements demanding that an organization not retain consumers’ credit card numbers, being able to explain to customers what happens with their information is key.

In upcoming articles, we will discuss use of smartphones, iPads and chip-card technology to accept donations, treasury management issues to consider, a primer on basic service pricing and an overview on PCI compliance and fraud protection.

Dave Voris is a vice president for Horizon Bank in Indianapolis. As a senior treasury management officer, he works closely with both middle market and small business companies from a wide variety of industries. During his 25 years of business experience include treasury management, merchant services, and international banking including sales management, client service and implementation management, product management and electronic payment operations.

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