Online Donations – 5 Factors Your Nonprofit Needs to Know

online-donationsToday most nonprofit organizations have integrated some type of online payment processing to collect donations on their website.  Yet, collecting online donations isn’t just as simple as putting a “donate now” button on your home page. With so many different options available, how does your nonprofit know which one to choose?

Below we highlight five factors your organization will want to consider if you wish to collect online donations.

1. Functionality. What exactly do you want your donation website to do? Are you looking to simply process online donations for a fundraising campaign? Or are you looking for enhanced capabilities?  Perhaps you want the ability for people to set up recurring payments so they can automatically make payments every month or quarter. Or what if someone wants to make a donation in honor of another person? Perhaps you are interested in highlighting top donors or selling sponsorship spaces to businesses?  Or perhaps you are looking for the ability to set up multiple personal fundraising pages where individual participants can collect online donations (this is often the case for pledge fundraising campaigns such as walk-a-thons). Write down your goals. Include all the capabilities you’d like your donation software to manage. This will help you narrow down your choices right from the start.

2. Ease of Implementation. While some organizations choose to develop their own online donations form, this can end up being very time consuming and costly for your organization. In order to easily collect donations and mange your donor details, you’ll probably want to implement some kind of donation software. There are many reputable companies that do this day in and day out – why reinvent the wheel when you can benefit from their expertize?

3. Company Reputation & Security.  Be sure to work with someone credible (after all, they’ll be responsible for managing all the funds for your campaign). How long has the company been in business? What clients do they have? What is their customer service like? Are they PCI compliant and knowledgeable about internet security issues? Keep in mind that whichever vendor you do choose, you’ll be working with throughout the duration of your fundraising campaign (and possibly into the future) so work with someone you like. Someone that is helpful, responsive…and perhaps a company that doesn’t charge extra for support.

4. Pricing & Fees. Of course pricing is a factor of any decision for a nonprofit. Your organization will need to investigate how much the company you choose to work with will charge for the donations you raise. Keep in mind that you aren’t always be comparing apples to apples.  So if a company offers a “free donation website” – what exactly does that mean? Does it result in higher than normal transaction fees?  Most companies will charge some type of transaction fee (meaning the company is taking a percentage of the donations you raise). But, this can range from 3%-9% (which is a huge difference)! Example: If your goal is to raise $20,000 – A company that takes 3% will receive $600 of that, where a company that takes 9% will receive $1,800. There are some companies that don’t take any transaction fees at all and only charge a flat-fee for a donation website. In this scenario, your organization would be responsible for managing the intake of your own money via the payment processor you choose.

5. Ease of Use for Your Donors. A very important factor to look at is just how easy it will be for a donor to make a donation. First, you’ll want to consider what the donation website will look like. Does your donation website have the same look and feel of your organization’s website, providing a seamless user-experience. You also want to consider how many clicks a donor must make to complete the transaction (and keep in mind that many online donors abandon mission if there are too many steps). Is there a simple “Donate Now” button that takes donors to a form that they can easily fill out & hit submit? A big consideration is also whether or not the donation processing form “lives” on your website. (i.e. one disadvantage of processing payment via PayPal is that donors are taken away from your site. Some people are leery of this)