A News Non Profits — 30 July 2018

by Peter C. Hohenstein

You already know sustaining donors offer a steady, reliable income stream. But did you know the method of donation also matters?

Using direct withdrawal via ACH—an electronic payment in which funds are withdrawn or debited from a donor’s checking or savings account and transferred directly to your organization—can benefit you in ways you may not have considered.

For example:

1. Direct withdrawal increases the number of sustaining donations. Donors who use direct withdrawal make an average of 8.2 donations in a 12-month period, compared to 3.5 donations in that same time period by donors using other payment types.

Also, sustaining donors who use this payment type give more frequently and at higher amounts over a longer period than traditional givers.[1]

2. Direct withdrawal leads to increased donation income. Recent research shows sustaining contributions are worth up to four times more than those from traditional donors. And sustaining givers who use direct withdrawal are 18 percent more likely to give after the first 12 months than those who use credit or debit cards.

Take Capital Public Radio in Sacramento: 76 percent of its funds are donated by direct withdrawal via ACH. In 2017, their donations totaled $5,350,027—with 57 percent coming from sustainers. Back in 2010, their total donations came to $3,425,097, with 28 percent given by sustaining members.[2]

How did they do it?

This dramatic jump came by educating their donors about the benefits of direct withdrawal. For example, the benefits of using direct withdrawal are explained to donors both on-air and through written materials. Capital Public Radio also used a variety of communications, including online donation forms, targeted emails, and direct mail. They also make it clear sustaining donors are signing up for a monthly donation that will continue until the member changes the amount or cancels the gift.

3. Direct withdrawal can save you money. Since its humble beginnings in the 1940s, Colorado-based Mission Hills Church’s membership has grown to more than 4,000, with about 3,100 members attending services across its campuses on any given weekend. When Mission Hills implemented online giving in 2008, about 3 percent of donations used direct withdrawal. By 2017, that number had climbed to about 40 percent of online giving.[3]

How did they do it?

Mission Hills, which received $8.05 million in donations in 2017, makes it clear to its congregation that direct withdrawal donations allow more of their contributions to be put toward church efforts and are preferred to credit card donations, which can cost the church up to 3 to 5 percent of the donation amount just to process. They also strongly discourage members from paying tithes on a credit card, so as not to incur debt while supporting the church’s mission.

In sum, ACH offers cost and time savings for your nonprofit. There are no hassles around credit card expiration dates or cancellations, and you don’t need to reconcile a check with a donation. It is a seamless, electronic payment that comes directly from your donor’s account—all the more reason to make it your default payment option.

Also, visit NACHA in Booth #611 at the 2018 Bridge to Integrated Marketing & Fundraising Conference, July 31 – August 2 at the Gaylord National Hotel to chat!

Peter C. Hohenstein is a senior director, ACH Network Administration, at NACHA—The Electronic Payments Association, the steward of the ACH Network that powers direct withdrawal via ACH. For more information on how direct withdrawal via ACH can help your organization build its sustaining donor program, visit ElectronicPayments.org/donor and download a toolkit.

 

 

[1] Donations Tracking Study, ConsumerQuest, October 2016. Data represents respondents’ behavior over a 12-month period.

[2] Case study, Capital Public Radio, June 2018.

[3] Case Study, Mission Hills Church, June 2018.

 

The views, opinions and positions expressed in this post are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of American News Report, Microcast Media Group or any of its employees, directors, owners, contractors or affiliate organizations. American News Report makes no representations as to the accuracy, completeness, currentness, suitability, or validity of any information in this column, and is not responsible or liable for any errors, omissions, or delays (intentional or not) in this information; or any losses, injuries, and or damages arising from its display, publication, dissemination, interpretation or use.

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