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Different Ways to Collect Donations for Nonprofits

Different Ways to Collect Donations for Nonprofits

One of the easiest ways to increase the amount of donations you receive is giving your donors as many options as far as payment as possible. Leveraging all the various donation collection methods makes sure that your donors can donate to your charity in their preferred manner rather than being restricted to only one or two types of payment options. This can include all sorts of fundraising events from in-person galas and auctions to online giving campaigns, which means to be effective, you need a few different payment processing options both on and offline.

Luckily with all the technology available to all charitable causes today, setting up and maintaining multiple payment options isn’t nearly as difficult as it was even a few years ago. And many options can be used on multiple platforms all at the same time including your website, your social media channels and even good old email. Any time you can make it super convenient for your supporters to easily make a contribution, you’ll always benefit from more funds collected! It’s just a matter of knowing which methods to choose from and how to implement them into your fundraising campaigns which is exactly what we’ll be going over in this article.

Traditional Methods of Collecting Donations

Just because something is traditional doesn’t mean it isn’t effective and not worth doing. You’d be surprised how many people still want to contribute using older methods of giving like checks or even cash. So it’s still extremely important you have procedures in place to take these sorts of donations and ways to record them for compliance issues.

Collect Donations by Check

Out of the four largest methods of payment by volume, good old paper checks are still king with over 44% of all donations received by charities coming from old fashioned checks. That’s almost half of all donations which means to not have some way of taking checks as contributions can mean giving up almost half of your fundraising efforts. Who would have thought, right!

This is mostly because almost half of all charitable giving stems from the Baby Boomer Generation which grew up writing and sending checks for almost everything. And old habits are apparently hard to break. And for good reason, checks leave a paper trail for the donor and are easy to account for on their taxes. Plus check writing usually involves a personal check ledger that is easy to look at to see what they’ve spent on charitable giving at any time. And if a check is lost or stolen, the transaction is easily cancelled and issuing a new check only takes a few minutes.

But this is also good news for organizations as checks also have the lowest processing fees associated with transferring their equivalent into cash in your bank account compared to all other forms of payment. That means more of your donor’s donation can be used to further your cause than transaction fees associated with mostly digital forms of payment.

Also, many people prefer to drop off a check personally which is a great way to meet your donors and build stronger relationships with them. And even if they send their check by mail, a hand written thank you note is an extremely personal way to show your appreciation and make your donors feel valued and recognized for their continuing support.

While checks are actually a safe way to receive donations, it doesn’t mean fraud cant happen. This is why you should include security protocols like including immediate endorsements with a "for deposit only" stamp and securing safe storage until the checks can be deposited at your bank. Having a regular deposit schedule multiple times a week helps minimize the risk of loss or theft. Furthermore, maintaining transparency with donors about how their contributions are processed and safeguarded can enhance donor trust and encourage repeat donations.

Cash Donations

Cash donations are less common and are estimated to make up around 13% of all charitable contributions. And although this amount is nothing like the staggering check usage, it still matters and having a way to accept, record and safeguard cash donations until they can be deposited is an important consideration.

Cash donations are often seen as a double edged sword as they are liquid and readily usable, but unless you have a secure method for accepting cash, it is also the most accessible to fraud or theft. These sorts of donations usually stem from in person live events like silent auctions or low cost Chinese gift basket events. This also means that it is possible multiple people will be handling these gifts and so the way they are immediately processed is your number one concern.

We strongly advise any time cash is involved you should always implement a process where all cash is promptly counted and recorded by at least two individuals to ensure accuracy and prevent any discrepancies and is essential for keeping financial integrity and donor trust. This dual verification process adds a layer of security and accountability severely lacking when only one individual is counted on.

Once accepted, each cash donation should be logged with details including the amount, the donor's information if available, and the context in which the donation was received as far as the event or circumstances. These records are needed for financial reporting and compliance as well as for providing donors with tax free charitable receipts if they request them. Locked donation boxes at events or designated collection points within the organization’s premises should also be used to avoid theft or loss.

Mobile Donation Methods

Digital wallets such as Stripe and PayPal account for around 28 percent of all total donations to charities, and the number is growing steadily. This makes a lot of sense as people become more accustomed to using services like these for shopping online and a host of other types of payments, they feel more secure in using them to make donations as well. And since 9 out of 10 Americans now have and use some sort of digital wallet, these types of payment options are no longer options, they’re expected.

The good news is these wallets are not just convenient for your donors, but for your organization as well. Many digital wallets work with nonprofits offering reduced fees and other perks created specifically for nonprofits. These apps are also incredibly user-friendly, allowing your donors to contribute with just a few taps on their smartphones which limits cart abandonment considerably. Plus many make it very easy for your donors to set up recurring donations making these apps very valuable indeed. And they are usually extremely easy to integrate with your preferred website or platform seamlessly so offering choices to your supporters is only as limited as your dedication to opening and integrating the accounts you choose.

Security is always a major concern when handling mobile donations. Making sure that your charity's account information is kept secure and that your transactions are monitored regularly can help prevent any fraudulent activities. In fact, these wallets use all sorts of encryption technology to keep your finances safe so you never need to worry, unlike many credit card integrations that require many types of securing by your organization rather than the credit card processor.

One item to note is that when you use a wallet that is easily recognized by your supporters, some of the trust they instill in the app also crosses over to you. They understand that as a nonprofit, if you’re using a wallet like PayPal, you needed to jump through a lot of hoops to verify your charity with them. This makes donors feel a lot more comfortable making their donations with these types of digital payment solutions.

Other Ways to Accept Donations Online

In order to compete, many organizations have turned to the web as a way to increase fundraising and getting the word out about their cause. This means that not only has marketing become more digital, so too has the process of accepting donations. Accepting donations for websites, platforms and other forms of a digital presence while very effective also require a very different way of collecting donations easily and securely than the old school forms we’ve discussed above.

Popular Online Donation Websites

When it comes to public platforms such as crowdsourcing websites or platforms made specifically for specialized causes like sports team fundraising or other smaller similar types of funding options, many of these sites can be very helpful for smaller organizations or those just starting out. One of their biggest draws is they are normally easy to get started using, don’t often incur monthly fees, can accept donations online and many have traffic sources already built into them.

These websites try to provide a convenient and easy way for organizations to reach their potential donors globally by leveraging the power of the internet and their traffic to support their causes. Among the most popular online destinations for many smaller charities like a 501c7 are GoFundMe, Kickstarter, and Patreon. Eeach of these sites are a bit different and are tailored for a specific niche within the charitable sector.

GoFundMe is most likely the most recognized of all the sites and has done a lot of good in helping to raise capital for both organizations and individuals alike. It allows both individuals and organizations to create campaigns for a variety of purposes, from personal emergencies to large-scale nonprofit projects and is easy to set up and pretty much begin accepting donations immediately. Additionally, GoFundMe's trust and safety measures provide a sense of security for both donors and recipients.

Kickstarter is another option and has become very popular for those with more artistic endeavours such as artist or book publishers. While not strictly geared to nonprofits, you are still free to use their website for your campaigns, and their community is often a great resource to tap into if your cause resonates with them. Their one of many drawbacks for non-profit work is they operate on an all-or-nothing funding model, meaning that if a campaign does not reach its financial goal within a set time frame, no funds are collected. This can be a real limitation for many nonprofits as fundraising is often an ongoing process rather than a one all.

Give Lively is a newer option and more specific to the nonprofit landscape. They are similar to the others on our list in that they have their own traffic to a point and getting started is relatively easy, but their biggest plus is they are a free online fundraising tool and while their capabilities are limited, it may be a great place to start if you are starting a nonprofit with a small budget or are a small local organization that doesn’t need too many bells and whistles.

There is of course many limitations and restrictions when it comes to using these types of sites, and whether they’re the best choice for your organization is going to be largely a personal assessment of your organization’s needs and requirements. All of these website do have their unique pluses and minuses, and how and what you can do on each can be a severely limiting aspect of their usefulness.

Using a Platform to Accept Donations and Fundraising

If you are a more established and larger charitable organization, the chances are you’re going to need a more robust suite of tools that can not only help with your fundraising efforts, but can also help run the backend of your organization on a daily basis. Platforms like PayBee were tailor made specifically for charitable organizations and can help you run your entire organization from one easy to use dashboard.

This includes any fundraising campaigns you may have, including both in person or online events. In fact, we offer an option for hybrid events giving you the best of both worlds all live and in real time. Just imagine holding an in-person gala event that you can also stream online on all your social media platforms while the event is going on in real time. We even give your supporters ways to bid on items and interact with your event regardless of where they are in the world, opening your charity to a global support base all overnight!

But it’s not just fundraising that can be improved with these complete platforms, your entire operation from collecting donor data, accepting donations in any form, following up with an automatic thank-you email, to recruiting and keeping track of volunteers and staff as well as a ton of other solutions can all be done from one place, greatly minimizing the time spent on daily tasks.

Cryptocurrency Donations

From checks to digital wallets, technology is having a major impact on all types of payment solutions and how we all accept donations. And as everything evolves, nonprofits have no choice but to evolve with them. And there is no doubt the next big advance in finance is cryptocurrencies. And while their acceptance as a donation method may not be very prominent as of yet, it is only a matter of time before they become more dominant.

Cryptocurrencies like Bitcoin and Ethereum offer a decentralized and secure way for donors to contribute to their favorite causes with practically no hassles or even costs. And this goes both ways. Since crypto is decentralized, there is no middleman like a bank to add fees when you collect donations using crypto. This is great news for everyone as even today with all of our technology, it seems fees still end up swallowing quite a bit of our donation funding anytime you collect any type of financial support. This is all in the past when dealing with crypto!

Getting started with cryptocurrencies isn’t as hard as you may think. Just like digital wallets like PayPal or Stripe, crypto simply needs a digital wallet that can receive various types of digital currencies. This wallet acts as a secure repository where the donations are stored until they are either converted into traditional currency or used directly for the organization's needs.

But since this is such a new form of currency, there are some things you need to be aware of. First and foremost you need to understand that crypto is incredibly volatile right now and can go up and down in value quite a bit, all overnight. This can be a great thing if it increases in value, but the decrease in value is also a possibility. But despite these challenges, the transparency and efficiency of blockchain technology can enhance donor trust and streamline the donation process and even help attract a new demographic of tech-savvy donors who prefer to primarily use digital currencies

Frequently Asked Questions (FAQs) About Different Ways to Collect Donations for Nonprofits

  1. Why is it important to offer multiple donation methods? Everyone is different and each individual has their own preferences when it comes to how they move their money around. The more options they have, the more chance you have at securing their donation.
  2. What are the benefits of accepting check donations? Check donations are still extremely popular and make up almost half of all payment options, especially among older generations. They have low processing fees, provide a paper trail, and enhance donor trust through personal interactions and handwritten thank-you notes.
  3. How can I ensure the security of cash donations? One of the best ways is to never have one individual responsible for all cash donations. Implement a dual verification process where at least two individuals count and record every cash donation. You can also use locked donation boxes and make regular deposits to minimize the risk of theft or loss.
  4. What are the advantages of using mobile payment apps for donations? Mobile payment apps like Venmo, PayPal, and Cash App are user-friendly, widely recognized, and offer reduced fees for nonprofits. They provide a convenient and secure way for donors to contribute, often allowing for recurring donations.

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Bill Allen

Bill Allen is an expat that has been travelling the world for the past 25 years. He received his MA in writing in New York too long ago to remember, but has been writing on all sorts of subjects far varied publications ever since. When he isn't writing he enjoys meditating and working on his own website, UpscaleDrinks.com. Feel free to connect with him any time.

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