Paperless Direct Debit drives donations
Play your cards right to increase fundraising
The year 1992 was an Annus Horribilis for the house of Windsor – but it was also the year that one of IE’s Directors got married. As the happy couple began life together they merged their bank accounts and rationalised their charitable giving – which was almost exclusively managed via Direct Debit. They ended up giving to seven charities including household names like Action Aid, NSPCC, Oxfam, Amnesty International and a few smaller Christian charities.
Twenty two years later they still give monthly to seven charities by Direct Debit. Unsurprisingly, as income has risen, their giving has risen with it. More surprisingly, four of the seven charities they give to have remained unchanged! That’s twenty two years of uninterrupted monthly giving.
By my rough calculations, in today’s money, I reckon their post-wedding giving must be about to tip over the £100,000 mark. And that’s just one household in a nation of 26.4 million. Such are the rewards of long-term donor retention and the power of Direct Debit.
Integrating paperless Direct Debit into a charity’s website is widely regarded as the ‘preferred solution’, allowing charities to both increase levels of regular donations and cut their internal admin costs. However, whilst charities have been quick to adopt other forms of new media into their communication plans, including e-marketing and social media, many are failing to invest in adding paperless Direct Debit to their websites, instead encouraging one-off donations through credit card, Paypal, Virgin Giving or Gift Aid, collection tins, sponsors and SMS.
There are a number of additional benefits of integrating paperless Direct Debit into your charity’s website, for both the charity and its supporters:
• Reduced accounting and payment admin.
While other forms of donation, such as cash and cheque, carry a huge administration burden, once set up Direct Debit is completely automated, meaning there is less internal admin work. Charities are notified each month when a donation is made, and can also be notified when a donor has cancelled their Direct Debit – providing an opportunity to make contact with them again.
• Reduce commission on transactions.
Every charity, and donor, wants to ensure that donations get spent on the cause they’re supporting. When compared with other methods of donation, Direct Debit is a much cheaper transaction for the charity. While a credit card costs around 2-3% for each transaction, Direct Debit can be as low as 1% per transaction, maximising the impact a donation can make.
• Supporters committing to a monthly Direct Debit donation are less likely to cancel their payment.
Those charities that only provide for one-off donations require the donor to be in the right frame of mind every month to donate again, and those signed up to regular card payments expire when the person’s card is changed, usually within a few years. With paperless Direct Debit, once a person is signed up, the donation will continue to be made from their bank, even if they change their card – providing a hassle free transaction for the donor.
• Supporters committed to regularly donate to a charity are more likely to engage and develop a relationship with the charity they are supporting.
If someone is regularly giving to a charity over a long period of time, a relationship can develop with the charity they support. This relationship can be maintained and fostered through branding and marketing to ensure the supporter engages further, and becomes an advocate of the charity.
And for the supporter making the donation:
• Paperless Direct Debit makes giving easier for the donor.
By removing unnecessary hassle for the donor, automatic monthly payments can be quickly set-up via your website. The easier it is for a donor, the more likely they are to support your charity.
• Furthermore, Direct Debit affords a greater level of protection to the donor – allowing them to securely manage their payment.
Despite all of the benefits of paperless Direct Debit, many charities still shy away from introducing paperless Direct Debit to their website because of the perceived complexity and legal restrictions surrounding collecting data. Essentially there are a series of hoops that a charity must jump through when incorporating it into their website, given the nature of the information collected.
At IE, we’re experts in paperless Direct Debit solutions and have a long history of implementing it successfully into charities’ websites, transforming their fundraising strategy and turning one-off donors into engaged, long-term supporters. We understand these restrictions, and have routinely helped many charities implement paperless Direct Debit.