Increase donor gifts with the ease of contributing monthly.

How To Use Electronic Funds Transfer (EFT's) Effectively To Increase Donations

Want to increase the amount of donations that your nonprofit group receive? Contributions to non-profit organizations, associations with memberships fees, and tithes made to houses of worship can be effectively managed using EFT's to keep the funds flowing without interruption.

Does your nonprofit organization or association have a need for ongoing or recurring payments? Perhaps you had pledges made to your annual campaign or capital campaign and the donor would like it to be spread over a period of time -- perhaps over a 2 - 5 year period.

Well, the best way to accommodate your donors and insure an ongoing revenue stream without the hassles of writing monthly checks and mailing them in is to use an EFT system.

Why You Would Be Helping Your Donors

Any retail establishment would tell you that "Customer Service" is one of the best ways to keep an ongoing revenue stream coming in for their business.

Giving each customer a great shopping experience which will in turn lead to them feeling good about that experience and returning again is at the heart of great customer service. Getting them to come back is as simple as making it as "easy and enjoyable" of an experience as possible.

Your nonprofit group should make donations from supporters as easy and enjoyable for them to make as possible. One of the best ways is to have large donations or pledges spread out over time and not having donors write a check for their pledge payment each month.

Writing checks out each month is a hassle for most and can also lead to a shortfall in your projected revenue when donors occasionally forget to send in their pledge portion. An efficient automatic payment system will also help keep the donor from "second guessing" whether their pledge is needed or being used properly and just ceasing to fulfill the remainder of their pledge.

How Do You Set Up An EFT System?

To get started, learn as much about Direct Payments as possible. Here is a great overview for Direct Payments. Then check out how to get started including the costs you will need to factor in.

1. Make EFT's a permanent part of your donation regimen.

First of all, you must establish this type of payment process with your board and make it a permanent part of your donation process. You don't want to set it up and then decide to take it away later only to upset the very same donors (remember large donations) that it is helping manage their donations. They may just decide to not give anymore. Remember, "customer service". Don't offer something and then take it away later.

2. Create a special EFT form or include in the checkoff list of options on your regular pledge form.

For pledge forms, whether for annual campaigns or capital campaigns, you will undoubtedly have a series of options for donors to choose.

Your donor checkoff list might include...

o I'll make a one time donation of _____________

o I'll make four quarterly payments of ________ each (Total _______)

o I'll mail in monthly payments of _________ each (Total _________)

o Please deduct monthly payments of _________ each (Total _________) direct from my bank account Signature Required.

o Please deduct monthly payments of _________ each (Total _________) direct from my Credit Card Signature Required.

You'll then have a space for them to record their checking account information which will enable you to draw from. For bank withdrawals you'll need the Routing Number (first set of numbers at the bottom of each check) and the Account Number (second set of numbers at the bottom of each check) with the bank name and address usually.

For credit card withdrawals you will need a space to record their card type (VISA, Discover, etc.), Name on the card, expiration date, billing address and three digit Security Code (shown on the back of the card).

Alternative: Create the same form electronically through your website. Make sure that your site uses encryption technology to insure that your donors information is kept safe. This is essential to avoid penalties from new federal privacy laws.

3. Establishing a system for ongoing payments.

With the pledge card in hand, you will need a way to record and manage the donation and payment. Most nonprofit software like eTapestry and Kintera have these capabilities. Write down and define your program sign-up and billing procedures.

You will certainly want to create employee training materials for Direct Payment procedures. If you are a small organization without employees, you will want to train your board and/or Fundraising Committee instead.

Once your EFT Program is complete to your satisfaction, test the system out on your Board Of Directors or staff. Your board and staff will insure the stability of the system as their donations come through. They will certainly tell other members and donors about their confidence in the program by their own involvement.

4. Securing ongoing payments through your financial institution.

Contact Your Financial Institution which you use to process your normal paper payments. Most likely they will be able to help your organization set up a Direct Payment billing program.

Alternative Monthly Withdrawal Systems

Most ongoing payments made through banks use the Automated Clearing House (ACH) network, including the Direct Payment method discussed at electronicpayments.org.

1. Money Transfer Processors

There are processing companies that will set up an account for you and help you manage your donations. They can handle etransfer payment solutions for non-profit organizations, associations, worship centers, churches, ministries and fraternities. Here are a few:

* Net30 Solutions - Donations, fees or dues can also be spread out over any given time period and collected automatically monthly or quarterly using the ACH system. Use their DirectBilling™ and VirtualTerminal™

* FirstACH.com

* PaySimple.com

* EFT Corporation

2. Credit Cards, PayPal and Other Payment Systems

If you have a pledge card showing the donor's credit card information, you can manually draft the charge on a set time of each month.

PayPal has an excellent payment processing system that is free to nonprofit groups (additional fees for other services may apply). Once set up, you may select ongoing payments drafted from the donors PayPal account or bank account. The PayPal system automatically sends an electronic receipt to a selected email address as well.

3. Donors Activate An Automatic Payment Through Their Own Bank.

Mention to your donors that they are in control of their donations to your group. Most financial institutions have automatic online bill payment systems that their customers can access.

It would be appropriate to find out how each local financial institution handles these transactions online. Ask your board members and staff members to give you the details of their own bank and then publish to your members and donors via email or newsletter.

Promoting Your New EFT Pledge Payment System

Develop promotional materials before your fundraising campaign begins. This will include:

A section on all pledge cards or donation forms.

A tri-fold pamphlet that explains the whole concept of EFT's and how it will help your organization and especially how it will help the donor.

An email announcing the start of the EFT program. This should be done a month or more before implementation.

An announcement in your newsletter or bulletin about the EFT program. This should be done a month or more before implementation.

Your website should have a story about the program and why your board decided to implement it.

Develop a "thank you" promotional item to present to those that sign-up. It might be a special coffee mug or other promotional item.

Send out a press release if appropriate telling the community about a new way they can get involved. Send a follow up release during your fundraising campaign or shortly afterwards to show the success of the program.

Get Started And Continue Monitoring

Once you've started your EFT donations program, you will certainly want to monitor for flaws or ways to enhance the customer satisfaction of your donors.

Occasionally, you should highlight a story about a particular donor and how the EFT has helped them support your organization. Emphasize the "ease of use" and making your organization, worship center or association more financially strong; thus, being able to carry out your mission more effectively.