It’s hard to believe, but Giving Tuesday is less than three weeks away. And associations that are hoping for larger, more frequent donations from loyal donors should consider implementing electronic funds transfer (EFT) via ACH (automated clearing house) payments, according to NACHA—The Electronic Payments Association.

What does that mean? According to NACHA, it’s “a type of electronic payment in which funds are withdrawn or debited from a donor’s checking or savings account and transferred electronically to your organization,” making it “an efficient means for nonprofit organizations to collect donations.”

Recent NACHA-backed studies have shown that donors who make their contributions using this method “donate more, donate more often, and continue to donate longer than other donors—making them a more valuable part of your donor base,” said Peter C. Hohenstein, senior director of ACH Network Administration at NACHA.

Not only does this payment method offer a straightforward way of moving one-time donors to sustaining donors by allowing them to easily authorize withdrawals on a recurring basis, but it also saves organizations the inconvenience of updating donors’ credit card expiration dates.

“Building and growing a sustaining donor base means [that] associations can ensure a consistent cash flow for the organization from loyal and committed donors,” Hohenstein said. “Sustaining donations provide uninterrupted support at a lower cost. Donations made by direct withdrawal via ACH are more cost-effective than credit cards, as credit card donations can cost an organization 3 to 5 percent of the donation amount just to process. Reducing costs allows donors’ resources to more fully support the mission of the association.”

But before your association enables this functionality, it’s important to follow a few of NACHA’s best practices:

Work with your bank and vendors. “This may involve working with either a specialized cash management or treasury management office or with your local branch personnel,” according to a NACHA whitepaper [PDF]. “With your vendor, ask them if your current software supports donations via ACH and if payments can be posted to your donor database.”

Ensure security. No association wants a security breach, which is why it’s vital to work with your internal IT team or an outside vendor on ensuring the security of your donors while you’re gathering their financial information and maintaining it.

Get it integrated. “To make things easier to track and report, integrate the receipt of ACH payment information with your donor database and accounting systems,” according to the whitepaper.

Enable online setup. Associations should make donating as easy as possible—especially during the busy holiday season. That’s why it’s critical to allow you donors to setup and schedule their donations completely online.

Has enabling electronic payments benefited your association’s funding efforts? Please tell us about it in the comment box below.

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