Helping nonprofits enter the future of fundraising

It goes without saying that the development initiatives of any nonprofit organization are fully dependent on fundraising and charitable giving – and the way those funds are collected has drastically evolved in recent years. The days of donating by paper check are limited and even in-person fundraising events have taken a step back compared to digital initiatives.

Rewind: The shift from physical to digital

Before this shift to digital – spurred on in part by the evolution of payments and a global pandemic – most nonprofit operations were heavily paper-based, widely accepting manual checks from donors. In the spring of 2020, many nonprofits started experiencing cashflow issues, due in part to supporters not being physically present to offer their pledges with checks or cash. To stay afloat, 501(c)3s of all shapes and sizes pivoted to focus on digital donation acceptance through mobile wallets, embedded payments, EMV chip cards and more.

The future of pledging is here

The demand for digital donations continues to climb. In fact, charitable giving donated through online sources has risen from just under 8 percent in 2022 to over 12 percent in 2023, according to a recent Trends in Giving report. This report goes on to note the digital as being most prevalent with smaller organizations, as they collected nearly 17 percent of their donations from online sources.

In this new era of charitable giving, nonprofit organizations should be equipped to process mobile and online transactions smoothly and in an integrated experience, in addition to readily optimizing and testing their platforms. Furthermore, the financial institutions (FIs) that serve charitable operations must keep pace with the technology if they intend to retain and grow their nonprofit customer portfolio.

As the world of payments constantly evolves, new and improved ways of receiving and processing donations continue to be developed. These advancements enable both FIs and independent software vendors (ISVs) to offer seamless experiences for nonprofits and their donors alike. Good payment partners of nonprofits should consider the following offerings:

• Flexible payment options: According to the 2023 Nonprofit Tech for Good Report, there are still gaps in payment options. The report states that while 91 percent of nonprofits surveyed accept credit card payments online, only a fraction accept newer payment options, including Google Pay (7 percent acceptance) and Apple Pay (6 percent acceptance).
• Recurring payments: Payment partners can bring value to their nonprofit clients by supporting recurring gifts and membership fees. Unsurprisingly, most recurring payments made to nonprofits are done via credit card – 91 percent according to The Recurring Giving Report. The remaining percentage of ongoing payments are made through ACH or eCheck, plus other sources such as PayPal.
• Integrated payment experiences: Just as commercial businesses can benefit from owning the shopping and payment experience, so too can nonprofit organizations. Here’s an example: If a nonprofit has an app or website, integrating payments within that digital space creates a more seamless experience compared to routing the user to a separate payment page.

Donors appreciate a one-stop-shop experience, and nonprofits enjoy access to affordable and flexible gifting options. What’s more, by helping to capture donors’ financial information digitally and turn it into operational or capital funding with innovative payment technology, FIs can attract, win and retain more nonprofit customers.

The return from transactional to relational

GiveCentral, a fundraising platform for nonprofits, shared with Deluxe their real-world understanding of the value flexible donations can bring to nonprofits. Most nonprofits prefer to keep their association with donors “relationship based versus just transactional,” said Bridget Daly, VP of Business Development with GiveCentral. But in a post-pandemic world, crafting personal experiences such as one-on-one lunches or annual galas is no longer as easy as it once was.

To bring the donor relationship back into focus, nonprofits need to pivot to payment options that transcend paper checks to ones that match modern payment preferences. Seamless user experiences and flexible payment options means less time spent on transactions, freeing up more time for relationship development. According to Daly, this also expands a nonprofit’s potential donor base, as physical geography is no longer a barrier.

“[Organizations] have taken a step back and really looked at who their donor base might be,” shared Daly, going on to say that new payment technologies allow nonprofits to “reach out to new audiences and invite them to participate in ways that they hadn't before.”

Innovative payment acceptance benefits everyone

Whether accepting recurring donations, one-time gifts or payment for event tickets, catering to donors’ payment preferences benefits everyone, from individual contributors and nonprofits to the FIs or ISVs that support them, and those who provide forward-thinking payment acceptance and processing solutions will be best equipped to grow and thrive.