Time for Nonprofits to Put Electronic Bank Transfer ‘Front and Center’ for Donors

Author

Michael W. Kahn

Michael W. Kahn

Nacha

NASHVILLE, Tennessee—Sustainers are the lifeblood of most nonprofits, and Nacha’s research shows an opportunity to convert regular donors to sustaining donors using ACH. “But what we found was that only 25% of donors are using ACH for their recurring donations,” said Brad Smith, Nacha Senior Director, Industry Engagement and Advocacy. “This gives us a big opportunity to grow this number.”

Smith was among the speakers at the May 4 session “Using ACH to Increase Sustaining Donations” at Smarter Faster Payments 2022. Fellow panelist Brenna Holmes noted that while most nonprofits are keenly aware of what happens when donations are made using cards, that’s often not the case with gift givers. 

“Donors don’t think about, and they haven’t until very recently been made aware of the cost for processing,” said Holmes, Principal and Senior Vice President at Chapman Cubine Allen + Hussey, a consulting agency that focuses on fundraising for nonprofits. “We see more organizations starting to put that front and center to encourage different types of giving.”

Electronic bank transfers—which is how many in the nonprofit world know ACH—can help increase giving and reduce costs. But nonprofits are “often using software that isn’t developed for nonprofit fundraising specifically,” meaning it might not be equipped to take electronic bank transfers, said Holmes. 

Even in 2022, “nearly half of all individual giving is coming in via check,” said Holmes, adding that she has clients where the figure is 95%. Smith said Nacha research found just 18% of those questioned about ways they donate cited ACH. As Holmes noted, “There’s a lot of education that has to be done.”

Washington, D.C.’s public broadcaster is doing its part. When viewers of and listeners to WETA-TV and WETA-FM call in during pledge drives, operators encourage using EFT, as they call ACH.

“Immediately when someone takes their pledge, they offer it to be on EFT,” said Brandon Hemel, Senior Director, Data Strategy and Management, Membership Marketing and Development Services, at WETA. Operators are ready to explain that “if you get your check, I can talk you through how to use EFT,” said Hemel. 

Those who go online to give get a subtle push toward EFT. “Immediately when someone goes online to make that monthly contribution it comes up to ‘Checking Account,’” said Hemel. 

Nacha’s Nonprofit Toolkit can help start or grow electronic bank transfer programs. It can be downloaded for free on Nacha’s website.