Direct withdrawal via ACH is the gold standard for recurring payments, such as monthly bills. This new research now shows that the same is true in nonprofit giving. Direct withdrawal serves as the foundation on which to build a sustaining donor program.
HERNDON, Va. November 07, 2017
– NACHA—The Electronic Payments Association® today announced the results of two recent studies that explore the role that direct withdrawal via ACH plays in nonprofit donations. The findings conclude that using ACH leads to more frequent and higher dollar contributions from sustaining donors.
The first study, conducted by ConsumerQuest, evaluated the ways in which people donate, and explored the impact of sustaining donations. The study found that sustaining donors make up the bulk of a nonprofit’s donation income, with 67 percent of organizational donations originating from a person who has given for at least the last three years. The research also demonstrated that direct withdrawal via ACH increases the likelihood of a recurring donation as ACH donors authorize automatically executed donations according to a set schedule (71 percent) versus those using other payment types (9 percent).
“Direct withdrawal via ACH is the gold standard for recurring payments, such as monthly bills,” says Priscilla Holland, senior director, healthcare and industry verticals, NACHA. “This new research now shows that the same is true in nonprofit giving. Direct withdrawal serves as the foundation on which to build a sustaining donor program.”
In addition to looking at recurring donations, the study uncovered other advantages of direct withdrawal via ACH, revealing ACH donors give more often, and in higher volume and value, than other donors, specifically:
ACH donors give more than double ($1,700 versus $650) in a 12-month period than those using paper check, credit/debit card, or other means.
ACH donors make an average of 8.2 donations compared to 3.5 donations by those who use other payment types in a 12-month period.
“The findings from the survey align with our own donor experience,” says Jennifer Halm, director of membership, Capital Public Radio in Sacramento, California, a nonprofit organization featured in a NACHA case study. “Seventy-nine percent of our sustaining donors now pay with ACH. They are responsible for more than 43 percent of all individual donation dollars, and we retain new ACH sustainers at an 18 percent higher rate than new sustainers who use credit or debit cards.”
The study also found that credit/debit card account information often changes for donors, potentially causing an administrative headache for nonprofits. Specifically:
55 percent of respondents had a credit/debit card reissued in the past year because it had expired or because there was a security concern.
38 percent of all the credit/debit cards used by respondents were reissued at least once during the past year.
“Direct withdrawal via ACH payments don’t have the challenges with credit card expiration dates or cancelled cards,” Holland said. “Further, ACH payments are more cost effective for nonprofits than donations made via cards, allowing more of the donation dollars to be directed to the mission of nonprofits instead of processing fees.”
A second study conducted by ConsumerQuest provided findings to support nonprofits in assessing the donor messages that will resonate in building direct withdrawal via ACH programs. The most convincing single message centered on helping nonprofits maximize resources. The statement, “Donations made via direct withdrawal are more cost-effective for your nonprofit,” rose to the top as a reason for donors to choose ACH payments as their donation method.
The research is available for download on electronicpayments.org/research. Additionally, both NACHA and Capital Public Radio expand on these findings, as well as discuss specific program results and best practices for using direct withdrawal via ACH in sustaining donor programs in a presentation, “Building Your Nonprofit’s Sustaining Donor Program with ACH.” The complimentary webinar and PowerPoint presentation are available for download here:
In addition to these resources, NACHA offers a complete nonprofit toolkit, consisting of a case study, checklist, best practices, and more, to support nonprofits in growing sustaining donor programs with direct withdrawal via ACH. These and other tools are available at electronicpayments.org/donor.
About NACHA—The Electronic Payments Association
NACHA—The Electronic Payments Association is the steward of the ACH Network – one of the largest, safest and most reliable payment systems in the world. The ACH Network creates value and enables innovation by universally connecting all U.S. financial institutions, and moving money and information directly from one bank account to another. In 2016, there were 25 billion ACH payments made that moved $43 trillion. NACHA also brings together diverse organizations to develop rules and standards to benefit payments ecosystem participants, including Electronic Benefits Transfer (EBT) and healthcare Electronic Funds Transfer (EFT). By collaborating with other standards organizations and geographies, NACHA facilitates compatibility and integration with U.S. payments. Visit nacha.org for more information.
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