Recently, we highlighted 3 key reasons why nonprofits should use an online payment processing tool:
- It supports the omnichannel experience;
- It drives transactions;
- It appeals to millennial donors;
Before We Begin…
Before diving into the tools, we simply want to highlight a couple of important things:
The first is that we do not have partnerships or relationships with any of these online payment processing tools or vendors. Our opinion is based solely on our experience, research, and and feedback we have received over the years from our clients in the nonprofit space.
The second is that we encourage you to explore potential tools further and, if possible, take the ones on your “shortlist” for a test drive to confirm that it is the right fir for your organization, both in terms of functions and usability.
Formerly part of eBay and now a separate company, PayPal offers discounts to qualifying 501(c)(3) registered nonprofits. Specifically, they charge 2.2% + $0.30 for donations up to $100,000, instead of the standard pricing which is 2.9% + $0.30 for donations up to $3,000, 2.5% + $0.30 for donations between $3,001 and $10,000, and 2.2% + $0.30 for donations between $10,001 and $100,000. All fees are paid by the nonprofit – not the donor. There are also no monthly fees.
PayPal: The Good
PayPal is popular in the online shopping world, and many donors will have existing accounts -- which can facilitate donations (both in terms of volumes and amounts). Those without accounts can make one-time payments via credit card. Nonprofits also get a special “Donate” button that they can use on their website, emails and social media accounts.
PayPal: The Not-so-Good
PayPal obliges donors to log into PayPal to complete a donation, which can be a hassle for some – possibly dissuading them from donating at all. In addition, PayPal was born in the e-commerce world, and so it has a “shopping cart” look and feel that can be inconsistent with some nonprofit websites. While this is probably a non-issue for Millennials and even Gen Xers, it could cause some friction for older donors.
PayPal has also been criticized as not having the greatest customer service. This criticism is usually less about the actual quality of service, and more about the means: 100% email. Phone calls are not an option, which can make it time consuming and stressful to resolve an issue.
2. Network for Good
Network for Good’s “DonateNow” integrates payment processing with branded donation pages and email marketing. Fees range from $79/month to $99/month, and there are no annual contracts. Smaller nonprofits may find it more viable to go with DonateNow Lite, which gives them a fundraising page and the ability to receive ongoing donations. The transaction fee is 5%.
Network for Good: The Good
As noted, DonateNow blends together multiple tools that, according to Network for Good, increase donors and donation amounts. It also integrates with Constant Contact, which many nonprofits already use. There are also built-in best practices and tips to help nonprofits maximize their fundraising campaigns, and all donation pages are automatically compatible with mobile browsers – which is increasingly important, as donors trade computers for tablets and smartphones.
Network for Good: The Not-so-Good
While there is plenty to like about DonateNow, the monthly cost may be prohibitively steep for some smaller nonprofits. And while (as noted) the lite version switches to a transaction-fee model, the 5% rate is more than double PayPal’s. This may not seem like much on an individual donation basis, but it can certainly add up.
DonorPerfect bills itself as an “all-in-one” software solution that integrates donor management, online payments (via TransFirst), membership tracking, syncing with Quickbooks, and advanced custom reporting. There is a one-time $95 setup cost, a $10 monthly fee, and a per-transaction fee of 2.99% + $0.20. Transactions that require an authorization are assessed an additional $0.25 fee. Nonprofits with a large donor base may qualify for reduced pricing.
DonorPerfect: The Good
DonorPerfect has a very positive reputation in the nonprofit industry, and is widely praised for aspects such as detailed reporting, centralized donor base, ongoing updates, and good customer service. The transaction and processing fees are closer to PayPal than they are to Network for Good, and the relatively low monthly fee makes it more viable for smaller nonprofits.
DonorPerfect: The Not-so-Good
To use DonorPerfect, nonprofits must set up a merchant account with TransFirst. Some nonprofits may balk at the requirement – especially if it means that accountability for some issues may rest with TransFirst rather than DonorPerfect. Smaller nonprofits may also be unimpressed that DonorPerfect’s scaled pricing rewards organizations with large donor bases, rather than makes it more affordable for those with smaller donor bases.
The Bottom Line
Ultimately, the right online payment processing tool is one that is affordable, safe, efficient, and most importantly: makes it easy for donors to carry out their good intentions. All of the options profiled above meet these criteria (to varying degrees), and so going with any of them is likely a safe bet. Our advice is that you spend a good amount of time researching and making sure that the platform you go with fits your finances, processes and overall business needs.