idealist.org

What to Look for in an Online Donation Service

Summary:

There are several different ways suppliers have organized support for online donations. Here are some suggestions on how to choose among them.

Answer:

This item was placed in an archive with other early FAQ discussions of questions about accepting donations online on February 24, 2006. To see the other articles, open http://www.idealist.org/npofaq/0/1547.html —Ed.

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Robert L. Weiner, a San Francisco Consultant, wrote to CharityTalk (a service of CharityChannel.com) on August 27, 2003, in answer to a question posed there earlier:
I assume you are referring to Network for Good (NFG), which is the online giving service
a Guidestar search connects to. Until recently, both NFG and Paypal had the
huge advantage of being free. But NFG started charging 3% of each donation
this month.

However, I wouldn't base my selection solely on price. You also need to
consider questions like these:

• Is this a sustainable business that will be around as long as you need
  them?
  
• Do they provide good customer service to both donors and their own
  clients?
  
• To whom is the donor actually giving? In the case of Network for Good,
  the donation is to THEIR foundation. NFG then makes a donation to you.
  Donors can choose to be anonymous, which means you won't be able to thank
  them or resolicit them.
  
• How much control will you have over the design of your online giving page
  (color, graphics, layout, links to other parts of your site, the number of
  funds donors can give to)?
  
• How, and how quickly, can you make changes in your online giving page?
  
• How, and how quickly, will you receive the donations? Do they hold your
  money for a time or is it deposited immediately?
  
• Do you want to accept multi-payment donations (e.g. the donor pays $1,200
  in 12 monthly payments)? If so, can the service do this?
  
• How will you find out that a donation has been made?
  
• Will the system provide a tax receipt to the donor?
  
• How will you get the donations into your donor database?
  
• What are the fee options? Do they charge based on the transaction volume
  or the value of the gift? If it's the latter, is there a maximum charge?
  
• Do they include other services that you might want to use in combination
  with online giving (e.g., ticket sales, email marketing, or online surveys)?

Marc Lee, CFRE, of Affinity Resources (marc@affinityresources.com) wrote on April 12, 2001, to announce that he had prepared a webpage with advice on how an online donation service should appear to donors. His firm offers consulting about such services.
The clicks a donor must make to donate online
should never be taken for granted.
But in the world of virtual giving,
where studies indicate that up to 80%
of retail shoppers abandon their shopping carts
before completing their purchase,
be sure to ask,
"Is our donation software missing
something important that causes donors to
quit before giving?"

To learn more about the best four step online donation process,
visit this link:
http://www.affinityresources.com/pgs/awz55donationprocess.html

No advertising or provider promotion, just analysis to aid your
decision.

John Blaber of CharitableWay.com wrote to the Online Fundraising discussion list on December 16, 1999:

(Editors's Note: Charitable Way has ceased operation March 26, 2001.)
I agree that there isn't a "one-size-fits-all" online
fundraising solution that is optimized for every charity and every donor.
This is a relatively new marketspace and several distinct models are
emerging, each designed to assist charities and donors in addressing
specific challenges. For charities it comes down to identifying what you
want to accomplish on the Internet, and then partnering with the right
solution provider(s) to pursue those objectives.

One approach is shaped by a charity's need for control of its
online presence. Beyond control, charities should also weigh the issue of
varying levels of service to charities and online donors provided by the
online fundraiser.

For example, being one of 600,000+ organizations listed in an online
database that accepts credit card donations does indeed provide a presence
on the Internet. For some segment of charities this level of visibility and
functionality will suffice to meet their online fundraising needs. Likewise,
some percentage of donors are willing to make use of a self-service model
that provides a universal catalog of hundreds of thousands of 501(c)(3)s and
self-evaluate based on 990s.

Other charities and donors will decide that their interests are better
served through an online fundraising site that offers more functionality and
more personalized service. For charities, the hallmarks of a higher value
added service provider might include:

• a direct relationship with charities, governed by a service contract
  
• explicit agreement with all participating charities to accept donations on
  their behalf
  
• profile and 990 information provided directly by the charities, so it's
  always up-to-date
  
• direct deposit information to expedite funds distribution
  
• marketing on their behalf to increase donations
  
• partnerships with e-commerce vendors to build awareness and drive
  donations
  
• solicitation of corporate and private sponsors for special matching
  programs and cause-marketing partnerships

Likewise some donors desire a more personalized, feature-rich giving
experience that includes:

• the ability to choose from a select group of charities, most of which have
  satisfied the evaluative criteria used by federations
  
• more ways for donors to give, including credit cards, payroll donations,
  shop-for-charity, and online payment currencies

Since most online fundraisers don't require exclusive agreements, charities
have the option of signing up with several sites to see which approach best
meets their needs over time. The research has shown that there's tremendous
untapped potential for increasing online donations, so perhaps the most
salient piece of advice anyone can offer is to get involved soon and start
learning from your early experiences how to get the most out of the
partnerships you develop.

John Blaber
Charitableway
www.charitableway.com

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A long list of resources related to online fundraising can be found as a file in the Nonprofit FAQ, see http://www.nonprofits.org/npofaq/0/1491.html

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Posted 12/17/99; revised 4/18/01; link revised 7/6/05 - PB