Why ACH Has Become the Go-To for Online Donations and Nonprofits

Non-profit organizations and online fundraising platforms require business operations that are streamlined, cost effective and efficient so that as much money as possible can go towards the cause. As an Independent Sales Organization (ISO) and reseller, it is your responsibility to assure the non-profit organization of the value of what you have to provide to them. When the service you offer is ACH processing, there are a couple of things that you want to keep top of mind for them, such as:

• Every Dollar Counts – Every non-profit and donation platform wants to hold on to as much of the donation money that they receive as they possibly can. Credit card processing fees reduce the total amount of donations received.
• ACH Transactions are a Better Way to Give and Receive – It is a lot easier to both give and receive donations via a seamless ACH system that charges lower transaction fees and allows those transactions to flow with ease.

The Fee Drain on Non-Profits

It seems like accepting credit card donations is the way to go at first look, but that isn’t necessarily the case. The problem with this is that the fees on credit card donations tend to range from 1.5%-3.5% which can significantly reduce the total funds allocated to the cause – amounting to thousands of dollars in lost donations each month.

On top of that, there are other concerns as well. For example, those who set up recurring donations via their credit card might have those donations declined if they don’t have the necessary funds available via their credit line. Plus, you always have to worry about donor fatigue when you ask them to donate larger sums to help you cover the cost of credit card fees.

Overall, credit card donations can be a major hassle to try to collect and might not be the most effective way to build your donor base.

ACH is the Donor-Friendly Alternative You Need

Non-profits should strongly consider accepting ACH donations in favor of credit card donations for several reasons. For one, they can expect to hold on to a greater portion of their donations as the fees for ACH donations are a much lower, flat fee rather than a percentage fee that eats away at the total amount of money donated to the organization. Even more importantly than that, ACH transactions are far more reliable. The blog at CharityEngine.com explains:

It’s worth noting that, on average, 30% of credit cards are reissued annually, whether that’s because of expiration dates, changing payment credentials, fraud, and data theft. Conversely, we estimate that fewer than 1% of bank accounts fail annually.

It would be both highly frustrating and highly costly to continue to try to process donations from credit cards that have expired. Yet, that is exactly the mistake that so many non-profits are making today. Resellers can use this as a convincing point to encourage them to migrate over to ACH transactions.

Ideal Non-Profit Profiles

Which types of non-profits could benefit the most from shifting from credit card donation processing to ACH donations? Several types of organizations that  have seen  success with this form of processing, including:

• Membership-Driven Organizations – These organizations routinely process donations from their patrons, and they need the power of ACH processing to help them handle that big workload. They can save a significant amount on transaction fees alone.
• Religious Organizations – Another type of organization that deals with a significant number of recurring transactions are religious organizations. Their members often set themselves up to auto-donate to affiliated religious organizations.
• Animal Shelters – If there was ever a place where donors care deeply about making sure that every dollar of their donation goes to the cause, it is with animal shelters. They can also benefit from the use of ACH transactions to enhance their ability to retain more of the money donated to them.
• Organizations That Accept Recurring Giving – Many organizations like food banks, community outreach programs, or educational non-profits rely on consistent, repeat contributions to fund their ongoing programs and services. By using ACH processing, they reduce the risk of failed payments due to expired cards and minimize transaction costs, allowing more of each donation to support their mission.

These are some great examples of the types of organizations that ISO resellers can support in making the switch from credit card donations to ACH donations.

Talking Points for ISO Resellers

Any ISO reseller that wants to improve his or her sales should focus on the key talking points that have driven major sales to non-profit organizations in the past. Among the things to key in on include:

• Side-by-Side Fee Comparisons – Many leaders respond best to simple dollars and cents figures laid out in a way that is easy to comprehend. Show them the raw numbers as far as how much their organization could save by making the switch. Break down the credit card processing model of charging a percentage fee on every transaction against ACH platforms that allow donor-covered consumer fees, enabling nonprofits to retain more of each donation.
• Mission-Focused Messaging – Remind the organizations about the duty that they have to serve their mission and vision for the organization. Their donors expect them to do this, and it is up to the organizations themselves to ensure that they have the funding to make those missions a reality.

Example: A Donation That Goes Further

Reviewing an example of how a donation might be processed via each method can help illustrate the impact on nonprofits. Let’s imagine a donor contributes $100 to an organization they care deeply about. If that donation is made via credit card, the nonprofit might only retain around $96.50 after processing fees. In contrast, many ACH platforms give nonprofits the option to pass a small processing fee along to the donor—known as a consumer-paid fee—allowing the organization to retain the full $100 donation.

This consumer fee model is increasingly common in the nonprofit space, as many donors are willing to cover the nominal cost in order to ensure that 100% of their gift goes to the cause. By using Vericheck’s ACH processing, nonprofits can reduce costs, increase donation retention, and give supporters a more transparent and mission-aligned giving experience.

ACH processing via Vericheck keeps the fees low and is mindful of the fact that many organizations processing huge numbers of donations over time. Therefore, we work hard to help save those organizations on their fees.

Allow us to help you craft a compelling pitch to effectively engage nonprofit organizations and donation platforms on the advantages of ACH processing.  Contact us today to learn how you can confidently navigate these conversations and grow your customer base.