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Thursday, July 10, 2008
A few months ago I wrote a paper entitled Demystifying Credit Card Processing for Non-profits. The document has a lot of great information to help not-for-profit organizations understand the types of processing solutions available, merchant account and processing fees, etc., but I have to admit that I was wrong when I said, "I can't imagine someone who has stolen a credit card going online to make a fraudulent donation to their favorite non-profit, but the credit card companies don't see it that way." I was commenting on the higher processing rates (based on greater fraud levels) that are charged for MOTO (the acronym is for mail order/telephone order but also applies to all not face-to-face) transactions .
Well recently I learned that a client of ours that uses our Weblink system for collecting online donations had a spike in their form activity with lots of rejected transactions. It turns out that online donation pages are sometimes targeted by credit card fraud criminals since the forms usually make it very easy to make a card payment -- without the complexities of ordering something. That's perfect for someone who needs to test a lot of stolen cards to see which ones are still valid and can be used.
Often an automated system is used to rapidly make sequential attempts, testing each card in a stolen file. Therefore one solution is to use challenge codes, where the person completing the form has to type in some hard to decifer letters that can't easily be interpreted by a computer. The problem is that this also creates an impediment (although a small one) to anyone who legitimately wants to make a donation. Nonprofits certainly don't want to make it harder for someone to give, so instead we implemented a system that monitors form activity and blocks suspicious activity. It has been active for several weeks and has successfully protected at least one other fraud attack.
Needless to say however, I'm revising that section of the whitepaper. Live and learn!Labels: credit card processing, online donations
Monday, July 7, 2008
Sure it's a rhetorical question. But are you really encouraging online donations in your direct mail solicitations? Not just by mentioning it as an option, but making it clear that it is the fastest, easiest and most cost effective way for the donor to give to your cause. Why not even offer an incentive for those who make their donation online?
Why push donors to give online?
It generates larger gifts - As much as 30% more according to studies I've read!
Collects email addresses - Virtually 100% of online donors will provide their current email address vs. much lower rates when you ask for the email address by other means.
Increases website visitors - Giving you an opportunity to tell them more about your programs and achievements.
Potential to promote recurring gifts - A well-designed donation page can present donors the option and encourage them to make a recurring monthly pledge, instead of one-time gift. By doing this via an online (vs. paper) form it's easier to step the donor through providing the necessary information and authorization.
Encouraging donors to make their gift online might take a little initial effort but I can assure you that the long-term benefits will make it well worthwhile.Labels: donor email addresses, online donations
Tuesday, July 1, 2008
Why do donors stop giving?
Sometimes they may no longer be interested in your cause, but frequently it is just that they forget or misplace your solicitation, given the many distractions in their busy lives.
Every time we ask for their support, we're asking them to take action -- write a check or go to a website to make a donation. Even if a high percentage of them do it, some percentage won't. The effect over time is pretty dramatic. For instance if each year 75% of those who gave the prior year renew their support, 100 donors in year 1 will become 32 donors in year 5 (100 *.75*.75*.75*.75=31.6).
A great solution is to stop giving donors a decision to make when you ask every year. If you don't already have one, establish a monthly recurring giving program. Yes it takes a bit more effort to get donors to sign up, but they just need to make that decision once. Let them know that they can discontinue their commitment at any time -- but now it requires them to take action to stop giving. You've now harnessed one of the most reliable aspects of human behavior -- inertia.
In studies by Harvey McKinnon, author of Hidden Gold and a leading authority on monthly giving programs, donors that enroll in monthly pledge programs generate at least 800% more in donations over their life-time.
If you'd like to learn more about tools and techniques for establishing sustaining or recurring gift plans you are welcome to download a free article we wrote called Creating A Successful Preauthorized Gift ProgramLabels: donor attrition, Monthly giving, recurring gifts, sustaining donors
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