Brother, Can You Spare Me a Dime Pros and Cons to Online Giving

Let’s go through a little thought exercise - a sort of parable.

Imagine you and a few staff members are shipwrecked on a deserted island in the tropics named DesiredFunding, about five hundred miles from the next inhabitable piece of land. Now, on this island there are swaying palm trees and small local wildlife. There is even a pool of fresh water to quench your thirst should you want water. So it is very suitable for you (think Gilligan’s Island, not Castaway). So suitable is the island that you decide to set up shop there.

You have many different amenities at your disposal on this deserted island. You have what are called “gifts of appreciation” which you can use to send to donors who give you money – the money, of course, would be good since your island is called DesiredFunding.

You have printers, and drums of ink. You have a nice web site and servers on which to host the web sites. You could even have a line of company vehicles at this point –since (if you haven’t guess yet) the parable is really focused on that fact you are on an island cut off from communication with the outside world, more so than the impracticalities of having cars and no gas stations. Feel free think about Gilligan’s Island again.

One day you decide the corked bottles that happen to float by your island every once in a while, with bills and checks in them – aimed at supporting your mission or vision on the Island – aren’t really enough to keep up with the increasing bottle count goals of DesiredFunding.

Before the disappointment of underperforming floating bottles wreaks havoc and sets the scene for a Lord of the Flies debacle, you decide to launch a new initiative. You’ll start up a more effective fundraising model. Instead of depending on sporadic, floating bottles, you desire something more efficient, more streamlined and easier to use.

So you think through several different improvement strategies on how to increase your financial support for DesiredFunding. Finally, you land on a plan. You declare that from now on DesiredFunding will not accept floating bottles – you will only accept floating canisters.

Several months later you start to see floating canisters come by the island. They are larger, but more sporadic than the bottles – but they are indeed, floating canisters. Ultimately, you are in the same situation. Now you can think about Castaway.

Henry Ford once said, “If I asked my customers what they wanted they would have said a faster horse.” What Ford was really talking about was innovation. He was suggesting that if he looked to his consumer for innovation he’d never have built a car. Innovation, sadly, is sometimes the main trouble spot for non-profits and churches.

Similar to the illustration about DesiredFunding, many non-profits are challenged by seeking new, improved ways to bring in more revenue (tithes and donations), and tend to fall back into the same habits. Instead of developing a new income streams, they chose to do more of the same. They don’t seek new, innovative ways to broaden their revenue.

Does your company, church or non-profit fall into that category?

The recent increase in online giving has truly launched a new innovation in how to generate revenue. When organizations approach online donations appropriately, they are able to use online giving as a powerful medium and delivery system. But there are a few pros and cons to this innovation.

Pros

The Power of Online Giving

When an organization can understand that in order to generate revenue, the giver must have a reason to give, then they will present a better solution. But it has to make sense with the rest of your messaging. A user must understand that online giving is a normal, aligned process you’ve chosen to better serve them.

This does a couple things: it helps develop trust and comfort, which in turn increases the potential for stronger giving. People simply need a reason to give.

Customization

But they also need a way to give. The organization should make sure that all their materials promote the ease of use with online giving. By including the automatic recurring billing, you can even succeed at allowing people to feel their regular, monthly gift is like a regular bill. Then they simply pay without having to recommit to donating every time.

When you are able to provide a sufficiently well-designed, custom online giving form for your organization, you will see donations and revenue increase.

Cons

Security

There are security issues to be concerned about. With the “industry” attached to hacking and identity theft, there are significant concerns about how secure your site is. Make sure your database is protected with encryption and that you have internal policies regarding the use of donor information.

How Customized is Customized

There are several options to choose from with regard to online giving. And it can become confusing if you are not familiar with the process. You will have to get a merchant account, a payment gateway, perhaps a shopping cart – if you also choose an e-commerce solution.

There is some programming attached to customization as well. All of it can be enough to create a major headache if you don’t get help.

Be sure to find experienced people to help you connect appropriately. When you do, your online giving functionality will go much more smoothly.

How to Handle Transactions

Another challenge you’ll face is an internal policy regarding which cards you accept. Are you going to allow ACH (automatic bank drafts)? Many ministries and other non-profits also face the use of debt cards. This comes up frequently in some industries. If your organization has either theological issue or ethical issues with giving debt card users the ability to have “drafts” taken from their account for a donation, you’ll need to tackle this important question as you launch into any major online giving functionality.

What is your desired funding? Be sure to weight the pluses and minuses you’ll encounter as you face this potential strong revenue generator for your organization.