Credit card companies take a fee from your online donations. If your donor wants to give a big gift, that could mean a big fee. For example, in the U.S. when a donor gives using an American Express card (which many big donors do), you're hit with a 3.5% fee.
So, most nonprofits tell their donors to give big sums in other ways.
"Send us a check", they say. But checks take a long time to arrive, can get lost en-route, and can get stolen.
"Wire us the funds", they say. But that forces your donor to write down your bank account details, go into their bank account, and set up the wire transfer, all in their limited free time. And you need to track your bank account, identify a wire, and manually issue a tax-receipt to the donor, all in your limited time.
Online ACH is a better way, and allows your donors to give from their bank account, all from your donation form. This is how it works:
Your donor enters into you donation form, and selects "bank" as their payment method.
2. After entering their name and email address (and any other information that you might require on your donation form), the user is taken to a page where they select their bank, log into their account, and select the account they wish to pay from.
See this video that illustrates how it works:
3. Once the payment is complete, the donor receives an email in your name, thanking them for the donation, and informing them that the tax-receipt will follow, generally within 2-4 days, when their bank approves the payment. In the meantime, the payment will appear in your GivingTech account like this:
Notice that no tax-receipt has yet been created.
4. When the payment is approved by the bank, we'll instantly and automatically create the tax-receipt and email it to the donor. If for whatever reason the payment is not approved, then the donation will be removed from the list of transactions.
What are the fees?
For ACH payment, our provider Stripe charges 0.8% per payment, capped at $5. Here are some illustrations of what the fee would be with Online ACH, as compared to the fee with American Express credit cards (3.5%):
Online ACH Fee
When do I receive the funds?
Once the bank approves the payment, the funds are available in your Stripe account and ready to withdraw. If you're working with one of GivingTech's international partners then the funds will be transferred to you at the standard transfer period.
Donors can make one-time, recurring monthly, and recurring yearly donations by ACH.
Refunds - Protection from High Fees
When you issue a refund on a credit card payment (even if it's 2 minutes after the payment is made), the credit card fee is not refunded to you. So if a donor mistakenly donates $100,000 instead of $1,000, you'll end up absorbing a $3,500 fee (as crazy as that seems, that's the policy of the credit card companies).
With Online ACH, payments can be refunded the same day with no fee. And if you do refund the payment, the most that you'll end up paying is $5.