Choosing a donation processor can be a fraught task. But it doesn’t have to be! Here are the essential functions your nonprofit will want to consider when exploring donation processor options.
“Donation processing” doesn’t sound like a super exciting topic, but in nonprofit fundraising, it’s at the center of everything you do. Donations are what keep your organization funded. They’re the end goal of most communications with supporters. So, if it’s hard or inconvenient to make donations, all your fundraising efforts are for naught. And that’s why it’s vital to understand what to look for in a donation processor.
In this post, we’ll break down the must-have functions of a donation processor. With a solid donation processor, you can fundraise without having to worry about losing donations because making a donation is hard, inconvenient, clunky, or time-consuming.
What is donation processing?
The short answer is that donation processing is how donors complete monetary donations on your nonprofit’s website. Typically, you see three basic types of donation processing tools:
- Buttons: Donate buttons usually link to a third-party site (such a PayPal) where the donor completes the transaction.
- Widgets: A widget is a tool that you embed into another website or webpage, usually with an iFrame. Widgets allow donors to complete a donation to your nonprofit through a third-party (such as Mightycause) without leaving your website. The widget is maintained by the third-party, so it should be plug-and-play for your nonprofit.
- Donation page: What a donation page does is create an online donation form that exists on your website, usually processing the donation through a third-party. This page allows more flexibility to collect information, allows donors to complete the transaction without leaving your website, and can be designed to look and feel cohesive with your website so it fits right in.
A donation processor usually does two basic things: It collects donor information for your nonprofit, and also processes the financial transaction. When we discuss “donation processor,” we are talking about those two elements together.
The Essential Donation Processor Functions
Your donation processor needs to do more than just process a transaction. The following seven functions are essential for donation processors at nonprofits.
1. Recurring Donations
Recurring donations are what keep nonprofits sustainably funded. So, if your donation processor doesn’t allow you to accept recurring donations, it doesn’t meet your nonprofit’s needs, period.
It should be simple and easy for donors to opt into making their donation monthly. On Mightycause, donors can not only initiate the donation, but they can manage it through their user account. That way, if they need to update their payment information or change their withdrawal date, they can do it easily. And that means never losing a recurring donor because of an expired card.
2. Friction Reduction
So, if you want someone to do something, the key is to make it easy for them. And nowhere is that more true than in the world of online payments. Whether it’s checking out on an e-commerce site or making a charitable donation, it’s all about reducing friction.
What does that mean, exactly? Think of it like this: Each step that is required of a donor is friction. The more friction present, the lower the likelihood is that they will complete the donation.
If your donation processor doesn’t let them take advantage of the tools available to make filling in their payment information easy, like allowing them to use their browser’s auto-fill or accepting the payment information they have saved on their phone, they may never make it to checkout. Believe it or not, how compelling your cause is plays less of a role in whether a donor completes their online donation than whether they have to find their wallet, pull out their card, and manually enter the information. And once they enter it, if they can’t save their payment info and have re-enter it manually each time… well, let’s just say the odds of having the donor return are slim.
That’s why reducing payment friction for the user should be a top priority when choosing a donation processor. Nonprofits should look for a payment processor that accepts multiple form of payment (all major credit cards including American Express, PayPal, even Apple Pay), allows donors to use their phone or browser’s auto-fill functions, makes it as easy as possible to check out, and facilitates making repeat donations.
3. Mobile-Friendly Design
Once upon a time, the most common ways to make a donation was in-person or through the mail. But times have changed! Now, most people make nearly all payments online, often with their smartphones. And this means that if a donor pulls up your website and tries to make a donation through your donation processor, and it’s not mobile-friendly, you’re likely to lose their donation.
Simply put, it is not acceptable for a donation processor not to have a mobile-friendly design in this day and age. Your donors will expect to be able to make their donations from their phones. And if they can’t, you’re in danger of losing them.
Mightycause is, of course, mobile-friendly. We design our platform mobile-first, so you’ll never have to lose a donor for something as small as your donation widget or page not working on a donor’s phone.
4. Integrations & Communication Between Programs
Most nonprofits don’t have just one piece of software they use for all fundraising functions. Especially at small nonprofits, it’s common to have a fairly complex workflow involving multiple programs that serve specific purposes. And so, when choosing a donation processor, it’s important to consider integrations and whether/how it will communicate with the other programs you utilize.
Time is money. And time spent manually moving data over from one program to another is time that could have been spent cultivating your donors, crafting appeals, and growing your fundraising program. Mightycause offers integrations with Salesforce, MailChimp, Eventbrite, and more to help make your workflow less convoluted, so you can spend your time on tasks that matter more.
5. Data Access & Control
There’s an adage that is extremely important to remember in this day and age: If you’re not paying for something, you are the product. And when it comes to donation platforms, it’s especially important. The unfortunate truth is that with some platforms, like Facebook, you don’t own your donor data, the donation processor does. And you will have limited access to it. (For instance, consider the shuttering of GoFundMe Charity this year. By the end of the year, donor data will be gone if it has not been exported. And that’s because GoFundMe owns that data, not your organization.)
It may seem bizarre to have to ask whether your nonprofit’s donor data, collected through your donation processor, belongs to your nonprofit. Of course it’s yours! Right? But, the fine print may say otherwise. It’s also important to know whether you have full access to your donor data. Facebook, for instance, just provides a list of transactions and keeps the bulk of the data for themselves. It’s a buyer-beware market. So, beware.
On Mightycause, your are our customers, and your nonprofit’s donor data belongs to you. We don’t utilize it to advertise or sell your donors anything, we never share or sell your donor data, and we offer unfettered access to robust, real-time reports.
6. Donor-Covered Transaction Fees
Something you might not realize is that when we’re talking about donation processing fees, there are usually a few different fees at play. You may be looking at a platform fee, which goes to the company providing and maintaining your donation processor. And there’s also a transaction fee, which is a fee a businesses (in this case, the donation processor) has to pay every time it processes a payment. Both are usually percentages, and transaction fees in particular can vary based on the credit card company. (For instance, American Express charges a higher transaction fee than other credit card companies, which is why some small businesses don’t accept AmEx.) Typically, online payment processor will aggregate the fees and charge a percentage that accounts for the variability between different payment types.
The big question is – can donors cover that for you? On Mightycause, we find overwhelmingly that donors are happy to cover fees. And on our platform, the covered fees are tax-deductible, too. Allowing donors to cover fees means that your nonprofit sees the full amount of the donations made. Surprisingly, some donation processors won’t let donors cover fees for you. So, it’s important to make sure that donors have that option when checking out, because it’ll cost your nonprofit money if they can’t opt to cover fees.
7. Brand Customization
Your nonprofit’s brand is important for many reasons, but when it comes to donation processing, it’s important because it builds trust. When your brand is front-and-center where donors are making gifts, they feel comfortable knowing their money is going to the right place. On the other hand, when donors are directed to a third-party site or asked to enter their sensitive payment information into a donation processor that is unfamiliar and doesn’t reflect your brand, they may feel nervous and back out of the process.
You should make sure you can do some basic customization to the donation processor, like adding your logo, editing the colors to match your brand colors, etc. Being able to both customize the donation processor and embed the widget or form on your website is the best option, because it makes the donation processor part of your website. That means donors never need to leave your website to make their donation, which will make them feel more comfortable entering their personal information.
Mightycause has a variety of options for nonprofits, including embeddable donation widgets and forms! Contact us to get a demo and find the right donation solution for your nonprofit.