Should We Begin to Accept Credit Cards?

July 11, 2013 9:20 AM

I belong to a small 50c3 organization. Should we allow members to pay registration fees via credit cards, or should we continue to only accept checks?

I am on the board of a small (roughly 3,000 members) 50c3 organization. There are times of the year when we receive a lot of checks for events. We were wondering, if we allowed members to charge their payments and added a donation button to our website, would we be likely to lose money, break even or make money?

I'm looking for the experiences of charitable organizations, but also of donors. Would you give more money if you could charge it? We would not spam anyone. We would not share our list. We do not solicit the general public at all.

Would accepting credit cards simplify our lives or make them much more difficult?

posted by clarkstonian to Work & Money (29 answers total)

Speaking as someone who donates to charity pretty regularly, I am much, MUCH more likely to give more money if it's as easy as possible. Clicking a button on a website or (even better) being able to set up regular donations (say, $25 per month to my credit card or deducted from my paycheck) is pretty much how I donate. I don't even know where my checkbook is, it's been so long since I wrote a check.
posted by rabbitrabbit at 9:26 AM on July 11, 2013 [6 favorites]

I only write paper checks in life or death situations. The donations I make to places tend to be via small credit card transactions online. So if I were your target donor, you would probably not receive a donation from me unless I could transact it electronically. I find it really difficult to believe that anyone around my age or younger would pull out an honest to god checkbook to make a donation, probably because they don't even know where it is.

As a data point, I have a Girl Scout troop, and I set them up with a Square register this past year for cookie sales. Probably a quarter of our booth sales were from people who said they didn't have cash (to which my girls would counter "WE ACCEPT CREDIT CARD!!!") but did have plastic.

I can't fathom that anyone would actually LOSE money by accepting credit card donations.

Also, if you do the social media thing (which you probably should be doing) just think how easy it would be to drop a donate link on facebook or twitter every now and then. WAY way better than, "if you'd like to donate, please send a check to 332 LOL who has checks AVE."
posted by phunniemee at 9:29 AM on July 11, 2013 [2 favorites]

Rule #1 in business is make it as easy as possible to receive money.
posted by bensherman at 9:31 AM on July 11, 2013 [2 favorites]

You should accept credit cards. They only people who get checks from me are those who have the power to coerce me into sending them checks.
posted by pseudonick at 9:34 AM on July 11, 2013 [1 favorite]

I've built websites for several small nonprofits and the response to adding Paypal to the sites has been overwhelmingly positive.
posted by COD at 9:38 AM on July 11, 2013 [2 favorites]

Joining the chorus to say credit cards are my preferred method of charitable giving, followed by automatic withdrawal for regular donations. I've never seen a Paypal option for donations but that would also work for me.

One of the reasons that credit cards work for me is that I sometimes make spur of the moment donations. This might not apply to your org specifically, but many is the time I have had to do a quick last-minute donation (usually in lieu of a gift for my saintly father) and I would never deal with someone who needed me to send them a cheque. This type of donation is probably worth $200 a year to me.
posted by looli at 9:40 AM on July 11, 2013 [1 favorite]

I am on the board of a small nonprofit, and MOST of our donations are coming in via our PayPal link. I recently made the option available for automatic payments and that is by far the option most of our donors choose at this time. We think this will save us a great deal of time and effort moving forward too. Less volunteer time spent on contacting previous donors and asking them to pony up again, less in stamps, etc, as well.
posted by terrapin at 9:42 AM on July 11, 2013

Here are my preferences in order from best to "not likely to give".

PayPal
Credit/Debit Card
Check
posted by michellenoel at 9:48 AM on July 11, 2013 [1 favorite]

I contribute a lot to charity. And it is almost never by check. Take credit cards, take Paypal, allow online and recurring donations, and in general make it incredibly easy to donate. Also, remember to thank your donors electronically -- it is free and very much appreciated.
posted by bearwife at 9:49 AM on July 11, 2013 [1 favorite]

I think the answers here are spot on, but wanted to address the "lose money" aspect. I assume you're asking if you'll lose money via the fees associated with credit card processing? I would think that any increase in donations would mitigate that -- if you have people used to paying check, some of them may continue to do so, and you'll get new folks who appreciate the flexibility and additional options.

Look into square, paypal, etc. to see which has the best fee structure for what you're doing.
posted by pixiecrinkle at 9:49 AM on July 11, 2013

Be aware that you will lose a few pennies per donation to fees associated with accepting credit cards. You will easily make these back and then some by having more donations.

Plus, you'll make money on the instantaneous transfer of funds to your bank account, versus the "float" with checks.

Also, it's MUCH easier to reconcile electronic donations than it is to manually enter checks.

So...yeah...welcome to the 21st century.
posted by Ruthless Bunny at 9:50 AM on July 11, 2013 [1 favorite]

How often are potential donors on your website? Is that the only place where they find out about your organization and events? If the majority of donors get info on your site as opposed to in person at some other event, then some sort of electronic option would speed things along. Especially, as phunniemee says, younger people are not in the habit of using checks at all.

I'm not sure what credit card fees are like for businesses (and maybe you can get a break being a non-profit) but my impression is that it's worth it as long as the charged amount is over a certain dollar amount. PayPal is also a great option. I am more likely to donate with a few clicks than having to get up, find my wallet, etc. (Lazy, yes, but truthful.) Plus, it may be just an illusion but PayPal seems slightly more secure to me (having recently had my credit card number used fraudulently.)
posted by Beti at 9:50 AM on July 11, 2013

I would add that I also give on the spur of the moment. I have done that three times in the last month. PayPal made my decision to give a no-brainer.

Two of my gifts were film-related kickstarters and one was to an animal sanctuary. All were done via PayPal.
posted by michellenoel at 9:51 AM on July 11, 2013

What's your membership like? If you're not soliciting the public and you're just relying on those 3,000 members, it depends a lot on what those people are like.

Is this a case where they're paying like annually for an event or membership? Are they older (and thus actually use checks so it's no big deal to write one)? Do they have to send in that check (as opposed to more impulsive donations) for some reason, like to maintain membership? If I pay you $150 for the gala every year, I'm not likely to up that payment just because I'm paying by credit card. I might give more often - instead of once a year to my favorite charities I can impulse visit the website and send some extra money. I wouldn't go find my checkbook to do that.

Do you still pay the 2.75% fee as a 501c3? Can your admin staff handle the credit card stuff in addition to some checks coming in?

That all said, the very general proposition is the easier you make it to give money the better. Eliminate as many barriers as you can.
posted by KAS at 9:53 AM on July 11, 2013

The existence of this question implies, in my mind, that you are looking for an excuse not to accept credit card payments. You will not find any justifications here to not accept credit cards. If you were a business that had 3000 customers, would you not accept credit cards?

Here's the thing: it is possible, though unlikely, that people might not choose to donate more money than they otherwise would have just because you accept credit cards. HOWEVER, you could probably get away with increasing charges and rates for events and the like and people wouldn't notice or feel inconvenienced because you accepted credit cards.

Also, people will be more likely to sign up for those "donate $15/month, charged to your credit card!" to make an annual donation than they would if you said "give me a check for $180."
posted by deanc at 10:01 AM on July 11, 2013 [4 favorites]

When I support my regular charities or make an impulse decision to give some money to a group, I do it by PayPal or credit card. If I had to remember to dig out my never-used checkbook to give, I'd give a lot less and never as an impulse decision.

I also get angry when I get lots of mailers and junk mail after giving. All I can think about is how much money is getting wasted on mailing me that junk. Make it easy and electronic and you get my donations.
posted by quince at 10:03 AM on July 11, 2013 [2 favorites]

Do it up. If I found out a nonprofit only accepted cheques, it wouldn't deter me from WANTING to donate, but I may get sidetracked and never get around to writing one up and putting it in the mail. Also, I track all my tax receipts by tagging them in Gmail and paying by credit card means I instantly get my tax receipt via e-mail. I'm a former nonprofit employee and currently sit on the board of a small nonprofit, for what that's worth.

Also re: cheques. A group of friends were chatting about this the other night (people in their late 20s to late 30s) and I was surprised to find out most of them don't even have a cheque book.
posted by futureisunwritten at 10:07 AM on July 11, 2013

Our church offers contributions via PayPal but almost no one uses it because of the fee (2.2% + $0.30). They prefer that 100% of their gift goes to the church.
posted by davcoo at 10:07 AM on July 11, 2013

To add to the chorus of data points, I believe I own a checkbook. I have never written a check, do not know how, and do not expect to change that in the near future.

If you want people in the younger generations to contribute, add some form of electronic donation. Credit card or otherwise!
posted by Ashlyth at 10:08 AM on July 11, 2013 [1 favorite]

I don't even HAVE a checkbook anymore and can't remember the last time I wrote a check back when I had one, so an organization that only accepts checks would never receive money from me. In fact, a "checks only" policy would make me seriously doubt the competence of the people running that organization.

Just reading this question makes me feel like I've travelled backwards in time.
posted by Jacqueline at 10:24 AM on July 11, 2013

If you have a PayPal option, I will use it right then and there while I am thinking of your company.

If you have a credit card option that is not PayPal, I will intend to use it, but if I don't have my wallet right there, I might never remember to come back at a later time and donate/sign up, so there's a chance you'll lose me.

If you want a paper check the chance that you'll get it from me is vanishingly small.

I'd much rather pay electronically, and if you have to bump the charge up a dollar or two to cover the electronic transaction fee, that's fine with me.
posted by Stacey at 10:25 AM on July 11, 2013

I am involved with a small non-profit which is entirely run by volunteers, and I have mixed feelings, actually. Accepting cards has made it easier for people to give us money (but this is payment for services, not charitable giving, so it's a little different than your situation-- we run workshops and charge small fees to cover costs). But the increased workload on the volunteer staff has not been zero. In addition to managing a bank account, we also have to manage the online payment account; it's another layer of bookkeeping. When there are disputes on payments or people want refunds, it's more complex/time consuming to deal with credit cards than checks (four-way negotiations between the person buying the thing, VISA/Mastercard/etc., the third party credit processing system we use, and our bank).

Similarly to davcoo we have had some people be upset about not all the money going to the organization. (We not pass on the charges for a credit card transaction nor increased our costs to cover the fees.)
posted by holyrood at 10:27 AM on July 11, 2013

You'll want to research the best possible rates for merchant services; they're going to take a few percent of each transaction, but the increase in convenience will probably make up for this. From what I understand this should be around 2-4% in general-- if you're getting much larger numbers, find out why and/or move on to another merchant-services company. You also want to make sure you're compliant with the law regarding how long you can keep credit card information in your files-- you may need to alter your donation forms so you can easily detach or separate the confidential payment information for destruction.

When getting information on your website or over the phone (never through email-- it's bad practice), you can capture a lot of information from the cardholder (billing address and zip, phone number, CSC). Generally the more of this you get in addition to the essentials, the lower your rates can be, as the card company has better assurance that the card is in the donor's possession.

Finally, just because you're collecting CCs online doesn't mean you need to process them online. That's very convenient and fast, but you could just as easily get your webserver to give the information up to an accountant or data entry person for manual processing, if your donation volume is more appropriate to that level. Examine the costs/benefits there, including employee time for manual processing. 3000 CC donations would mean an average of only 12 cards/weekday over a year, but that's assuming everyone switches at once. Naturally this will spike during your donation drives/events/direct mails, etc.

Just to add to the chorus, I recently finished a book of 25 checks, and noticed that it took me 4 years to get through 25 checks. If I can sustain that rate of about 6 checks a year (doubtful), I will have to reorder checks in 2021, by which point they should be thoroughly extinct.

By the way, my local public radio station will often ask for me to contribute an additional $3 (not sure if this scales up or down; I usually give them $100 or so) to cover the credit card fees. It's not a big ask. It can be a checkbox on your direct mail. (It should be opt-in, not -out.)
posted by Sunburnt at 10:37 AM on July 11, 2013

Get Stripe, it's really easy. It's 2.9% + 30 cents per successful charge and you won't do better.
posted by DarlingBri at 11:44 AM on July 11, 2013 [1 favorite]

Aren't checks those little paper tickets you use to pay the rent? I'm confused.
posted by oceanjesse at 12:00 PM on July 11, 2013

I just stepped off a charity board, and we spent the last year debating this. All our research showed, hands down, that this would dramatically increase our membership numbers, and the amount of money donated to the organization.
posted by NotMyselfRightNow at 12:13 PM on July 11, 2013

I run the website and the donations platform for a church. For the longest time they would NOT go that route until we discovered that there are platforms which do not have a monthly fee. WePay and PayPal (in order of my preference) are two that come to mind. Expensive? Maybe. More likely to bring in MORE donations? Definitely.
posted by brownrd at 4:12 PM on July 11, 2013

You don't solicit the general public, and you're small. If credit cards don't drive up your total receipts, all they will do is add another expense.

For example, I have to pay my bar dues. When I do that I can also donate to pro bono. The ability to do this by credit card does not drive up my total donation, as I already have to pay my bar dues.

I can imagine many scenarios involving tiny nonprofits for which credit card acceptance is going to be a boon only for the banks.
posted by massysett at 6:06 PM on July 11, 2013

Response by poster: I wanted to post this followup: We started accepting credit cards. It has been an unqualified success. Thank you for your input.
posted by clarkstonian at 8:56 PM on February 8, 2014 [1 favorite]