Developing contactless payments for charity donors
September 2023
Exciting News! Rethinking the Future of Charitable Giving
We are thrilled to share a timely article that our Managing Director, Elroy Fernandes, recently authored, diving deep into the rapidly evolving world of charitable donations.
“Developing Contactless Payments for Charity Donors”
In today’s unpredictable economic landscape, charities face unique challenges, from high energy costs to staff shortages. One common thread that can make or break their success? Fundraising.
Cash or Contactless – Why Not Both?
While cash still holds its own, the use of contactless donations is increasing at an unprecedented rate. Ever found yourself wanting to contribute to a collection basket but had no cash? Contactless payment is the answer!
Tech-Savvy Fundraising
The article also touches upon the importance of embracing technology, especially for small and micro-charities, who rely heavily on public donations. Leveraging digital collection plates not only streamlines the giving process but also offers invaluable insights through data.
Gift Aid Simplified
One of the many advantages of going digital is the accuracy and efficiency in claiming Gift Aid—a cumbersome process when dealing with cash donations.
Read the full article to get detailed insights: http://charitiesmanagement.com/Magazine-No151/M0L3S/page-3.php
We are committed to revolutionising the way we think about charitable giving and invite you to join us on this exciting journey!
A copy of the article is included below.
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The Dona Team
After battling the pandemic, charities across the UK continue to adapt. In a tough economic environment, they face the shared burdens of high energy costs; inflationary pressures; volunteer, staff and talent shortages; and a need and desire to transform and modernise operations, to accomplish the objectives that they have been set up for. Success is dependent on income, revenue and capabilities to fundraise effectively.
But where is funding coming from? How is it being generated? Where do cash, digitisation, contactless card donation terminals and online donations fit in today’s fundraising landscape?
Funding sources today
According to the Benefact Group’s report, The Value of Giving 2022, the total value of charitable giving in 2022, volunteering and donating combined, was £23 billion.
The public is the most significant source of income for charities of all sizes. While unsurprising for some, the report validates that 62.5% of micro and small charities depend on the public for income. For major charities, this changes to 47.7%. Other sources of income for all charity sizes include government (26%), the voluntary sector (10%), investment (9%), the private sector (4%), and the National Lottery (1%). These figures underscore the vital role that the public plays in ensuring the fundraising successes of charities.
Cash and contactless
Within public donations, cash remains king – but it must now share its throne. Mintel’s report, UK Charitable Giving Market Report 2022, says cash is the second largest method of giving (23.13%), after direct debit/standing orders at 51.16%, and ahead of website and apps at 14.61%.
However, consumer payment methods are changing and the use of physical cash is declining. Statistics from the Bank of England show that transactional cash use has fallen from over 50% of payments in 2010 to only 17% of all payments in 2020, with the trend towards cashless payments accelerating during the Covid-19 pandemic. Yet cash remains the preferred payment method for 21% of the population. Clearly, if charities are to maximise donations, they need to provide opportunity for both cash and, increasingly, contactless and online payments.
How often, for example, have we walked past a collection basket at a supermarket or village fête with little to no cash in our pockets, wishing we could donate with a contactless payment?
Additionally, some people may be distrustful and wary about giving cash, out of concern it might not make its way to the charity concerned, and be used correctly. This is where contactless, digital collection plates and online donation webpages can offer a trusted answer. What is more, they allow people to give as much or as little as they like quickly, easily and unobtrusively.
Most organisations are encouraged to digitise operations, with the UK government actively driving this – and charities are included. Research from Blackbaud, The Status of UK Fundraising, 2022 Benchmark Report, emphasises both the opportunity and the challenge, stating that almost 80% of charities agree technology helps improve supporter relationships; and 67% admit they understand how technology can help. But, at this stage, only 56% are investing in technology, with only 35% saying they know how to optimise it.
POS versus donation terminals
Herein lies some of the problem about digitisation – choice and usability. Some charities are exploring contactless payment systems designed for retail. Contactless point of sale (POS) devices used in retail do not accommodate the sophisticated fundraising needs of the charity sector; which must be able to receive donations independently of POS tills and manage Gift Aid.
A good example of digital collection, used well, can be seen at charity runs like Tough Mudder where contactless terminals have been set up to collect donations , or at Somerset House where these contactless payments are used to support charitable giving on-site.
Moreover, digital collection plates have been designed to track and present data to charity fundraisers through management portals more effectively than retail POS systems. They provide an array of insights about the state of giving: total amount donated by contactless weekly, monthly and annually, as well as average donations across these time periods.
This enables charities to understand trends relating to donation locations and times; the actual number of people who have donated; and how many donations have been Gift Aided; and more. They enable relationship building with donors, capturing email addresses in a GDPR compliant fashion; so that charities can continue to communicate beyond the initial point of donation. All of which helps improve the donor experience for the charity too.
Making contactless work
As charities consider contactless technologies they should appreciate a few points. On average, individuals donate £12 per time via digital collection plates – a significant amount when the average of all giving, including direct debits and standing orders, is £27 per person per year. Typically, when deploying them, charities recoup investments within a month.
But achieving success requires strong internet access, either via a WiFi or 4G-enabled system. This is because the system makes secure real-time checks with the banks that cards belong to when payments are made.
Deciding where to place digital collection plates is essential. They are often the size of a tablet, and can be affixed to floor stands, wall mounts and countertops. Their size and mobility make them ideal for use in an array of settings like shopping centres during fundraising drives; football stadiums; churches; and even the entrances to large corporate offices or co-working spaces. Key to success is making them visible and known.
Payment data is protected and payments are secure. Terminals are designed so that they cannot be affected by card skimmers. Encryption ensures that if the device is stolen, no money or card details can be retrieved – and, since contactless payments send money to the charity’s bank accounts, no cash can be stolen off-site.
Practical considerations
Device power is important to manage. Typically the battery power on devices lasts around 10-12 hours, and is capable of lasting a full day of fundraising. Additionally, depending on how charities use terminals, they can be housed in custom-built, charity-branded kiosks and be connected to power. Alternatively, devices can be swapped and charged when battery power runs out, or just connected to a charging point.
Aside from this, keeping devices dry is important. Similar to mobile devices they are normally housed in a waterproof casing. This protects them from water or spills. Otherwise, when not cased, if it rains, street fundraisers try their best to stand under umbrellas to protect the devices, or charities try place them in dry locations anyway. For instance, the Lantern Arts Centre, Raynes Park, southwest London, has a contactless device located at the entrance to accept contactless donations from attendees at its theatre shows.
Further, for these systems to suceed, it is important that charities announce to the public and internal teams that they are using them. Don’t hide them away either. Ensure there is an internal champion who is driving the use of the technology, enabling the charity to achieve the desired fundraising, Gift Aid, data insights, and relationship building potential offered.
Gift Aid accuracy
Enabling Gift Aid easily and accurately for charities and donors is key. When people donate cash, charities often have two people counting it together to ensure accuracy, and are required to follow due process when registering it for Gift Aid and HMRC. This can be prone to human error. However, with digital giving the process is quick and accurate. Donation terminals enable donors’ contact details, card information and payment information to be filled in and accepted within a couple of minutes.
In comparison to cash, accounting for Gift Aid with contactless is straightforward – card transactions are automatically logged correctly according to user and contact details, and management portals allow Gift Aid coordinators to download data in a format ready to submit to HMRC, with the right evidence required to claim Gift Aid. So, when Gift Aid transaction claims are submitted, the evidence is ready to use, accurate and easy to submit.
Endless possibilities
The public offers a vital source of funds to charities and digitisation is increasingly important. While cash does remain king, its queen is contactless. However, for these systems to thrive, they need to be complementary to other fundraising strategies as ubiquity grows. They also need to be custom-designed for the nuances of charitable giving – and easy to deploy and use. When harnessed correctly, the possibilities for use are endless.