Aug 18, 2016
Every penny counts when running a nonprofit. Each cent of donations to your organization should go toward furthering your cause, not paying hidden bank and credit card fees. Donors feel the same way and don't want to experience the consumer side of these unnecessary charges. How can your nonprofit avoid unnecessary fees? Read on.
Use a processor with clear pricing
Most payment processing companies have varied costs for different things. ACH transfers may incur fewer fees than credit card payments, for example. It can be difficult to keep track of all of this, and you may lose more money than you realize. Instead, help your organization flourish by working with a payment processing company that charges a flat rate. This way it won't matter if you receive more of one type of donation - you'll always pay the same amount per month.
Encourage donors to use ACH payments
ACH payments are processed directly through a donor's bank account. These reoccurring transactions are better for nonprofits because they don't involve credit card processing fees. Plus, people who sign up to have their monthly donations automatically withdrawn from their bank accounts are likely to be donors for longer. They don't have to think about or put any effort into donating - it's a win-win situation!
Ask your bank questions about late fees and charges you've never seen before.
When deciding what bank to work with, ask around. While many of these financial establishments are part of larger corporations, their relationships with the community are crucial. Talk with other nonprofits about what banks they use to learn the pros and cons of your options. Also ask questions if ever you find your bank is charging you extra. Interest fees, late fees or bank fees may be mistakes or might not apply to nonprofits, so always ask before paying a charge you've never seen before. Many banks offer specific accounts and plans for nonprofits to help organizations better manage their finances. Take advantage of these specialized offerings.
Avoid paper checks
Some people prefer to use paper checks because they like to keep track of their money in a handwritten ledger. Processing paper checks can incur bank fees. Plus the time it takes for the paper to become money in your organization's bank account is much longer than for electronic transfers. Donors also have to pay to get paper checks, and that's a burden they shouldn't have to bear. Instead, encourage people to provide funds via ACH or credit card transfers. These processes are quicker and easier plus less costly for all parties.
Reduce refund headaches
At some point, you will have to issue a refund to a donor who accidentally double processed a donation or for another reason entirely. Refunds can be a pain to nonprofits because processing the funds so they return to the original source can cost the organization money they don't have. Work with a payment processor that has full refund capacities and won't charge you extra to return donations.
Keep all these points in mind when selecting a payment processor, and you'll save your organization time and money, plus foster better relationships with your donors.