The Pros and Cons of Payment Methods

Vol. 13 No. 2

development eletter Vol13 No2 communicationideas

There are dozens of ways for donors to make their financial contributions to your capital campaign or annual fund, and each has advantages and disadvantages. With your time at a premium, you can’t evaluate them all. To help you decide what method works and which wastes your resources, we've compiled this pro-con list of three common methods of payment.

Before we dive in, we should note that we're not recommending one of these methods over another, or any of these over other ways we didn’t include here! Every school has a different constituency that would take advantage of different giving opportunities; it’s up to you to vet and evaluate what would work best at your school. So, without further ado, let's take a look at three common ways to accept donations for your various fundraising efforts: by mail, phone, and the Internet.

By Mail

Oh, donation request letters. Carefully crafted, printed, and mailed out in the hundreds, these letters often contain self-addressed, prestamped envelopes for donors to insert their credit card information or a check to support your program.

While schools can and do receive donations by mail through such letters, the fact remains that it can be time-intensive to craft and stuff worthy materials—financially draining your budget. By not including the postage-paid envelope, however, you put a barrier between the donor and his or her ability to give, making it less likely your school will receive a donation.

If the financial aspect has made sending physical letters almost infeasible this year, examine which active donors have made substantial donations by mail and send them the letter with a return envelope. The others can either receive a letter without an enclosed envelope or be contacted in other ways.

Or, you could experiment with the Reply Mail options at the post office. Basically, you give a lump sum of money to the postmaster, who then uses the funds to pay for the envelopes mailed back to the school. The donor doesn't have to fuss with finding a stamp and paying for the envelope, and you don't spend more than you have to on return mail.

Over the Phone

Phonathons and other methods of payment over the phone can be quite effective. They place donors in a position to give immediately, and they include that personal touch of a school representative talking directly to the donor.

Several logistical problems exist when receiving donations over the phone. One is scheduling and training the people required to call prospective donors. You could avoid this complication by using an outside firm, but that tactic could lack the intimate note of someone from your school calling. (Not to mention, telemarketing firms can be frightfully expensive!)

The second issue concerns privacy and information protection. Revealing credit card information over the phone might make donors uncomfortable, more so than filling out encrypted Web pages or even old-fashioned paper forms.

Via the Web

Many organizations now utilize some type of online or electronic giving method. It could be directly on the school’s website through a custom-designed plug in, through a third-party vendor such as PayPal, or even with a crowdsource funding organization like Razoo or Fundly for specific capital projects.

Theoretically, online payments are faster and more convenient for families. You could even set up a monthly donation model to draw directly from a donor’s card or bank account, eliminating follow up and hassle for everyone.

However, online pay isn’t entirely hassle-free—at least, not from your school’s perspective. These services often require a fee or initial set up charge, so they’re not free, and dealing with third party organizations can give your school headaches when coordinating or trying to fix problems.

More than that, an online donation form can sometimes seem impersonal. If electronic or online payment is your primary donation method this year, you need to work doubly hard to build and maintain relationships with your donors beyond an automatic “Thank you for donating!” end screen. You could also mitigate this issue by emailing a welcoming, friendly message to potential donors, providing the link to the donation page, thereby making the online giving option more personal.

When deciding how you’d like to ask your donors to give this year, remember to account for your donor population’s previous preferences. Just because you’d love to not stuff envelopes this year doesn’t mean you get to ditch them all in favor of online methods if most of your donations last year came through the mail.

By the same token, each payment isn't an all-or-nothing decision. You could try out all three, placing emphasis on the donor letter campaign while still providing payment options by phone and online, for example. In this way, you can make the path to donation as smooth as possible for the supporters of your school.

Additional ISM resources:
ISM Monthly Update for Development Directors Vol. 8 No. 5 Share Your Accomplishments and Experiences During Your Phonathon for Maximum Impact
ISM Monthly Update for Development Directors Vol. 9 No. 4 Online Giving: A Tool to Maximize the Relationship
ISM Monthly Update for Development Directors Vol. 8 No. 8 Online Giving Is Growing--How Well Does Your School Communicate?

Additional ISM resources for Gold Consortium members:
I&P Vol. 25 No. 3 Online Shopping Rebates: Balance Dollars and Drawbacks
I&P Vol. 36 No. 7 The Campaign Feasibility Study: A Map to Campaign Success

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