Online Fundraising Basics: Lesson 2
Now that you’ve figured out your online fundraising goals, it’s time to explore platforms for accepting online donations. Platforms for donations include crowdfunding, merchant services, third-party processors, and software made for nonprofits.
Crowdfunding For Nonprofits
Crowdfunded projects are typically event-based or campaign-based. They have a defined monetary goal and a fixed number of days to achieve it. These campaigns tend to work best within highly active social networks where word spreads from person to person, or when administered by a team of independent fundraisers.
The crowdfunding model has recently seen a good amount of success. This approach can generate excitement and lends itself well to nonprofit fundraising.
Crowdfunding campaigns tend to impress board members and volunteers when they see them in action. But make sure this method of fundraising suits your organization and that you can create the sense of urgency crowdfunding campaigns need.
If you think crowdfunding will work for your campaign, check out a few of the popular nonprofit crowdfunding platforms. They include Razoo, Classy, Fundly, and GoFundMe. Crowdfunding platforms are convenient for specific, one-off campaigns. However, they don’t give you the opportunity to provide ongoing information about your growing organization. Also, keep in mind that options without monthly fees require high transaction fees, ranging from 5% to 7.9% per transaction
Merchant Services For Nonprofits
Organizations with the ability to directly process debit or credit transactions have a merchant account. But getting a merchant account can be an arduous process, and the fees can be costly. Typically, to apply for a merchant account for your nonprofit, the account holder will be asked to provide a lot of financial information. They may also be required to pay a one-time application fee, monthly fees, and additional fees per transaction. A merchant account can make sense, but it might require a high volume of transactions to offset the higher initial costs.
Third-Party Donation Processor
If your organization wants a lower-cost solution that is easy to maintain, third party processors, such as PayPal, are great options. Third-party processors have built the payment platforms for you. Some are even customized for nonprofits and offer specialized features to ease fundraising efforts. These are good for organizations without the resources to have their own merchant account or the technological manpower to develop a custom system. But there can be downsides:
- While some third-party processors transfer your funds to your bank account within 24 hours, others delay payment for up to 30 days. Always confirm payment details before signing up to make sure the donations you receive are quickly available.
- The name of the processor (like PayPal), rather than your organization’s name, frequently appears on communications, such as email receipts and credit card statements. For donors who aren’t paying close attention, this can be confusing.
- Donation tracking can be difficult since the platform may not identify the amount deducted for fees or the donor’s personal contact information. You will also need to manually enter any donations you receive into your accounting system.
Accepting Donations With Aplos
If you are looking for a low-cost, easy solution for accepting online donations, the Aplos Software Suite will probably be a great fit. With low transaction fees, Aplos provides essential online fundraising features for nonprofits. The cloud-based software also enables you to export your donation and donor information for each transaction. Aplos believes in the importance of a branded donation webpage, and allows you to create as many pages as you need for various purposes—at no additional cost. You can also prepare donation statements and automatically track donations in the software. So take five minutes to see how to build your branded donation webpage. Then you can determine if it is a good fit for your organization. Try it free without a credit card. There’s no setup cost, no contract, and no monthly minimum.
Donation Platform Resources
However you accept online donations, you’ll be glad you chose to because your donors will have a convenient place to give. Check out some crowdfunding best practices, look into third-party processors, or learn how to pick a merchant services provider. You can also look at how to accept donations using Aplos. As your organization grows, continue to research new methods. Ultimately, we want you to make the best choices for your nonprofit.
Create Your Donation Webpage
As you prepare your organization to receive donations online, you’ll want to learn how to best increase your revenue. In our next lesson, we will give you a list of best practices for building donation webpages so you can be confident you’ve set your nonprofit up well to accept online donations.