May 14, 2008
Charities Courting Trouble With Plastic Donations
Should charities be pushing their donors to use their credit cards when they give?
The anonymous blogger who writes Don’t Tell the Donor answers that question with an emphatic no, especially in light of growing concerns of a spike in credit-card defaults.
The writer predicts fund raisers and others will soon have to rethink the recent practice of encouraging donations on plastic. She also says charity leaders really need to think about whether it is ethical to encourage such donations.
“Many people think a credit card default crisis is closer than we think,” she writes. “So, what should we do? Continue to ask donors to put their gift on credit cards… but only if they promise to be responsible and pay off the card balance every month?”
Are charities courting trouble if they accept donations on plastic — or are they simply offering donors a more convenient option for giving? Click on the comments link below this post to share your thoughts.
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Not convinced that the author provides any clear data that this “crisis” exists as they quote a credit rating company, which is highly biased, and an amateurish news article. Yes, there are issues, but I think this is crying wolf.
Anyways, the benefits of credit cards far out weigh the costs/risks for many nonprofits and donors. It is far easier to process credit card donations than check donations for most orgs, once the workflow is established. There certainly are fees, but there are fees for all kinds of transactions.
It sure makes sense to pay attention to financial trends, but this is silly – online & monthly giving are hugely successful and efficient ways to collect donations and it is laughable to think that an org would move backwards to only accepting checkscash – what’s next, “Only Gold Accepted”
Finally, I strongly doubt that individuals on the brink of bankruptcy are donating large amounts to charity, at that point they are most likely trying to remain solvent and spending on essentials…
— Nate May 14, 01:51 PM #
Checks vs Credit Cards issue is the wrong question. The better question is “What is the most donor friendly that our donors can support us?” There will be multiple answers, and one that many non-profits have forgotten about is payroll deduction in workplace giving campaigns, such as the Combined Federal Campaign (CFC).
The following excerpt is from my CFC Special report, available at www.cfcfundraising.com.
CFC is the Most Donor Friendly Means of Giving
If you stop and truly consider the charitable giving process from the donor’s perspective, not just your own non-profit’s perspective, the CFC is the most donor friendly means of donating to any non-profit.
The Federal public servant donor, with one pledge card and one transaction:
● Can donate to multiple charities with just one pledge.
● Gives money to the non-profit before it ever hits their checkbook.
● Accrues no interest charges from credit card donations.
● Is secure—their personal information is never on the Web, and government payroll systems are secure.
● Receives a consolidated year end statement about all charitable donations for tax purposes.
Regards,
Bill Huddleston, CFC Expert
www.cfcfundraising.com
$1 billion in unrestricted donations in the past five years, less red tape than any grant.
How much did your non-profit receive?
— Bill Huddleston May 14, 04:22 PM #
At Central Dallas Ministries, we just analyzed all of the ways that we receive funds, and determined that the most efficient method was monthly bank drafts. This method not only ensured that we got the funds without needing to worry about credit card authorization, but it also decreased overhead by removing the processing charge associated with credit card donations and also reducing the staff-time involved in processing the transaction.
I plan to blog more on this soon, and how we are also making a tie-in to the environmental movement with this campaign, but I wanted to send a quick comment.
Jeremy Gregg
http://theraiser.blogspot.com/
— Jeremy Gregg May 18, 07:12 PM #