It is important for a non-profit organization to provide various credit card payment options to potential donors. It ensures that the donors can pay conveniently. There are several options available today. They can be broadly divided into three categories:
Open a Merchant Account
The non-profit can open a merchant account with a bank or a credit card company. The advantage of this account is that when a donor makes a payment through credit card, the money goes directly into the non-profit's bank account. The advantage here is that when the donor receives the credit card statement, the name of the non-profit will be mentioned on it. This account helps to enhance the image of the non-profit.
But the downside of this option is that formalities and paperwork may be elaborate. The non-profit will be treated like any other business organization and will undergo similar checks and verifications. The second disadvantage can be the complicated fee structure, which may also vary widely from one bank to another.
Use a Third Party Processor
Wherever the non-profit is unwilling to opt for a merchant account, it may go for a third party processor. Such processor will have its own merchant account that will accept donations on behalf of various affiliated organizations, including yours. The processor will receive the payments, and forward them to your account. It will charge a processing fee for providing this service, and the funds may take a slightly longer time to reach your account.
A disadvantage of this option is that the donor's credit card statement will not show the name of the non-profit that has actually received the donation. In certain cases, the donor may not appreciate this fact and may register a protest with the non-profit. However, this situation can be avoided if the non-profit duly informs its donors about the name that they will be seeing in their credit card statement. Paypal is a good example of a commercial third party processor that provides such services to non-profit organizations.
Use a Customized Credit Card Processing Program
There are various credit card processing programs specially designed for non-profit organizations. They operate just like a merchant account, but usually offer many more value added services as well. Some of these services include client relationship management, and seamless integration with the non-profit's website and banking system. Such programs are custom designed for fund-raising purposes only. DonorPerfect is an excellent example of such a program.
The advantage of this option is that the non-profit keeps a direct control over the donor payment. The donor never gets to know about the processor. Furthermore, such a program improves the financial management and efficiency of a non-profit that receives multiple donations regularly.
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