Nonprofits Looking for Donations can Bank On It

The online world has been a boon to nonprofits in many ways, helping them generate awareness, engage volunteers, and raise money.

Online fundraising through websites and social media is, of course, an increasingly important aspect of a nonprofit’s development activities. But there’s another sometime overlooked electronically-based avenue that may hold promise for nonprofits, and it revolves around the world of EFT (Electronic Funds Transfer).

One EFT opportunity for nonprofits is through an affinity credit card. Affinity cards are simply credit cards that take advantage of a consumer’s relationship with a particular business or organization. Most any nonprofit can have its own credit card, with the organization’s identity on it, through affinity card programs offered by many banks. Typically, the nonprofit receives a small contribution for each credit card transaction, so the program won’t generate a lot of cash unless there are many cardholders participating. Nonetheless, an affinity card offers an easy, automatic way for a nonprofit to raise money from its donor base, as long as it can convince the base to accept a new credit card and use it on behalf of the organization. Some banks offer the same type of program with debit cards.

A similar opportunity is available through systems that credit a nonprofit for a donation when the cardholder specifies the organization’s name. OneCause, for example, allows consumers to shop with more than 1,300 online merchants while “earning” contributions with each purchase for the designated nonprofit. Currently, OneCause has close to 8,000 nonprofit causes and over 74,000 schools participating in its program. OneCause offers a Visa card that essentially functions as a cause-related affinity card.

Perhaps a more interesting and less restrictive EFT fundraising implementation is taking place via bank ATMs. A year ago, Wells Fargo Bank and the Red Cross collaborated on an emergency relief campaign to help victims of the Japanese earthquake. Customers who used Wells Fargo Bank ATMs saw a message that encouraged them to donate from $1 to $249 to Japanese relief. Wells Fargo did not charge any fee for the transaction.

“Where can we reach donors in their everyday lives – that’s the idea,” said Michael Brown, VP for corporate and foundation partnerships at the American Red Cross. “Wells Fargo came to us to find out if there was something they could do using their ATMs, and that seemed to be a natural fit. Donors love it. They can do it conveniently, just go ahead and push a button to give a dollar.”

Wells Fargo has used its ATM network to raise money for other charities, but mostly on a regional basis. The bank does allow charities to apply for its ATM donation program through the Wells Fargo Foundation.

It turns out other countries are actually far ahead of the U.S. in ATM-enabled donations. For over a decade, Colombia’s Servibank has facilitated $1 nonprofit contributions through its ATM network and has seen contributions grow to about 100,000 transactions monthly. The BBC reports that the UK studied Colombia’s program and will institute its own national ATM-based charitable program this summer, when more than 12,000 ATMs will accept donations. While HSBC already permitted donations through its ATMs, all of Britain’s banks will join the program, selecting eight charities for consumers to choose from, even though more than 500 charities expressed interest.

The British government, sensitive to budget cuts for charities, is behind the program. Nick Hurd, minister for civil society, said, “By making it possible to add donations at cash points we can make an even greater difference to other people’s lives. It’s important that as a government we bring public sector bodies, businesses and civil society organizations together to find new ways to support charitable and voluntary action.”

The U.S. government is unlikely to follow suit, but the practice could be gaining popularity with individual banks. If so, it makes good sense for nonprofits to sign up and get their piece of the EFT pie.