Weighing
Your Options for Processing Donations Online
Written by Sumac Research
November, 2010
Online
giving is growing. Being able to accept donations online, therefore, is
critical to any size organization. For large non-profits this is rarely
an issue, since they can afford expensive database software that enables
an integrated merchant account. But what options are available for small
and mid-sized non-profits?
Third Party Processors
If you are a small or mid-sized nonprofit looking for a simple and immediate solution for accepting credit cards online, you are probably looking at using what is called a “third part processor.” Third party processors collect donations for you and then pay you at the end of each month. It is fast and convenient since you don’t have to set up a payment page on your website. Instead the processor gives you a “donate now” link to add to your website. In a few minutes, your donation page is up and running.
Some third party processors will also allow you to customize the look and feel of the donation page so that donors are not even aware they have left your website. But they generally charge more per transaction. Here is a comparison of the most popular third party processors:
Less Expensive, But Cannot Customize Look of Donation Page
|
Processor |
Rate Per Transaction |
Add Custom Fields to donation form |
Accepts Pledges/ Recurring Gifts |
Benefits |
Drawbacks |
|
Google Checkout |
1.9% - 2.9% + $0.30 |
No |
No |
- Low transaction fees - Can integrate with Google Analytics |
- Must have a Google account to complete the donation process. - Not designed for donations; the cart can be confusing as it shows quantity ordered and asks about the shipping address |
|
Network for Good
(Basic) |
Processing fee is passed onto the donor by requesting a “tip” of 5 to 15% to cover Network for Good’s costs |
Yes |
Yes |
- Affiliated with Guidestar, so many U.S. nonprofits are already listed with the service |
- Requires user registration - Multiple page donation form. - Only available in the US |
|
Amazon Simple Pay
Donations |
2.9% + $0.30 |
Yes |
No |
- People recognize and trust Amazon |
- Not designed for donations - Users must leave the organization’s website to donate - Only available in the US |
|
Just Give |
3.00% |
No |
Yes |
- Low transaction fee |
- Asks your donors to donate to Justgive.org during checkout |
|
PayPal
(Standard) |
1.9% - 2.2% + $0.30 |
Yes |
No |
- Secure, well recognized brand |
- Not designed for donations |
|
Canada Helps |
3.00% |
Yes |
Yes |
- Low transaction fee |
- Only available in Canada |
More Expensive & Can Customize Look of Donation Page
|
Processor |
Rate Per Transaction |
Add Custom Fields |
Accepts Pledges |
Benefits |
Drawbacks |
|
Click & Pledge
(Premium) |
4.5% + $0.30 8.5% + $0.30 (for American Express) |
Yes |
Yes |
- Organizations are able to sell items as well as collect donations |
- high transaction fees |
|
Firstgiving |
7.5% + $300 annual fee |
No |
No |
- Offers integration with Facebook by allowing users to display their current supported cause and a button to donate |
- High transaction fees and customization is limited |
|
Network for Good
(Custom DonateNow) |
3% + $199 set up fee + $49.95 monthly fee |
Yes |
Yes |
- Donors have the option to cover the credit card processing fee on their transaction |
- Relatively high fees |
*Data
was gathered from the organizations themselves and from a review
conducted by the Grinspoon Institute for Jewish Philanthropy.
Another Option: An Integrated Merchant Account
Many larger nonprofits who process thousands of donations each year set up their own payment page on their website using a merchant account that is integrated with their database to save time on inputting data and avoid paying a middle man for every transaction. In the end, these organizations actually save about 1%-2% per transaction. While this may not seem like a lot, it is when you consider hundreds of thousands of dollars in donation over a period of many years. These organizations also save a lot through reduced administration costs, because they do not have to import or manually enter donation information from a third-party provider into their in-house database; the website is directly integrated to their internal systems.
In the past, the database software used to support an integrated merchant account was expensive and not scaled to meet the needs of smaller nonprofits. That’s not the case anymore. There are now cost effective software packages available that can integrate your merchant account with your database and are scaled for small and mid-sized non-profits. For many organizations, a quick solution is what they need and they don’t mind paying extra money for the convenience. If however, you are thinking long term and want to save time on data entry and money on transaction fees, you should be aware that there are other option available.
Sumac is a complete
nonprofit software
solution for nonprofits that includes online payment processing that is
connected to your database.
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