How to Implement Credit Card Payments for Nonprofit Organizations

Charities that depend on donations benefit from accepting credit cards.

Nonprofits that accept donations should implement credit card payment systems as soon as possible. The ability to pay by credit card encourages donors to give more, especially since they can earn points and frequent flier miles at the same time. A credit card system guarantees payment of pledges and brings the cash to your account more quickly. It will also eliminate bounced checks and processing errors. You should have both an online and an on-site method.

Things You'll Need

• Nonprofit bank account information
• Computer
• Internet Access
• Board of Directors resolution

Instructions

OnLine Services

1. Research organizations that provide on-line credit card payment resources to nonprofit organizations. Some are for-profit. Some are nonprofit. Be careful. Some providers charge a flat monthly fee for a business nonprofit account. Others advertise a "free" account and then pile on transaction fees once donations start coming in. Some allow you to sign up in seconds. Others require more time-consuming application processes.

   PayPal is one of the most common methods of collecting money online, and one of the easiest sites to navigate.

2. Read the user agreements for the credit payment providers you find. Be sure you understand the fee structure before you begin registering and providing private information like your IRS employer identification number. Check out nonprofit support sites like Charity Navigator or Board Cafe or your regional Nonprofit Development Center. They often have forums where you can ask others about their experiences with various providers.

3. Begin the registration process once you've selected a service provider. You will have to provide an e-mail address that will serve as your account's access point. For some providers, this address will be the User ID people will give when sending you money online. There is usually a verification process in which the provider will send you an e-mail and you will respond by clicking a link in the e-mail that takes you back to one of their secure pages. This verifies you are a person and not a robot.

4. Provide the credit payment provider with your bank information--usually an account number and bank routing number. The provider will probably ask you to verify your bank account by making a small (usually $1) deposit into your new account from your bank. This tells them you have a right to access that bank account.

5. Find the web page on the provider site that allows you to create your donation button or widget that you will use for your own website. Some sites use this link to send people out of your website to theirs to make the payment. Some simply open a window to their payment page without closing the window to your website. Use the second type if you can. You don't want them to rush off from your website. You may have other things to show them.

6. Promote your website's new ability to accept credit card donations. In some cases the provider will offer a way for your donors to also make bank transfers on the same site. If you have both capacities, advertise them both. Use your donation button or widget on your website's inside pages as well as the home page. The more often they see it the better. Add the donation button to all e-mail newsletters you send out and print the information and website address on any printed promotional materials you use. The more people that know they can donate online, the more donations you'll get.

Merchant Account

1. Inform your board of directors before you apply for a merchant credit processing account. The bank may require them to personally guarantee against personal charge-backs. The nonprofit will, of course, cover such charges, but the bank wants a live human held responsible. Get a board authorization for setting up the account with the bank. Most board members understand about merchant accounts and will give you good advice about how to set one up and who has the best rates in town.

2. Visit the bank where you have your checking account and ask them to help you set up a merchant credit card account. They already know you and have your records at hand. This will save you time.

3. Fill out the massive amount of paperwork the bank provides you. For some reason, accepting credit cards requires a lot of forms to be filled out. Be patient. It will be worth it. For one thing, your nonprofit's name, unlike with some online providers, will appear on the customer's credit card statement. This provides you with one more opportunity to promote your nonprofit's brand.

4. Get a second (or third) opinion. Read the fine print. Check the merchant account rates of other banks in the area. If you have a substantial annual gross income, many banks will offer special rates on merchant accounts in exchange for moving your main accounts over to them. Use the free market to get the best deal possible.

5. Study the materials they give you and learn how to set up and use the credit card processing machine they give you. Train every staff member or volunteer who will be accepting credit card payments in the proper way to process transactions. Control access to the credit card machine. Keep it in a double locked area.

Tips & Warnings

• Keep your board treasurer informed all through the process. The treasurer may even volunteer to help you set the accounts up. Let her.

• Make the "donation" button available on every page of your website and on every e-mail newsletter or correspondence you send out. The more people know about the availability of online contributing, the more likely they'll use it.

• Watch the fees, particularly on merchant accounts. There's no such thing as a free credit card processing account. If they don't get their money up front, they'll surely take it our in fees, which can spiral upward quickly.

• Be sure your board is kept informed and participating at every step as you set up the credit card processing accounts. That way they have ownership if there's a problem later and will help you fix it.

• Check every credit acceptance company's reputation with the Better Business Bureau and by searching the company name online. News stories will appear if the company is having problems or is under scrutiny. Steer clear of questionable providers.

References

• Association of Fundraising Professionals: Website Back to Basics: Online Giving
• Fund-Raiser Help: Accept Credit Card Donations
• Idealist.org: How to Accept Donations Online Using Credit Cards

Resources

• PayPal
• Credit Card Payments on Mobile Phones
• NexCommerce: Non-Profit Merchant Account
• DonorPerfect: Nonprofit Credit Card Processing Tools