Provider Requirements
Online Donation Engine Providers
by Marc Lee, CFRE

There is a wide variety of options when it comes to obtaining donations online. Mixed with genuine confusion about what the best approach might be are the sales pitches of different companies all competing for a market share.

It's hard to unravel the various options. This article, together with the table that follows, compares the fee structure of many different companies that offer online donation engine services to nonprofits.

Donation engines are a type of software sometimes called an ASP because they are sold by companies known generically as Application Service Providers (ASPs).

A donation engine is (primarily) backend software that is (usually) transparent to the user. It allows a nonprofit to place a "Donate Now" link on their website. The engine collects and processes credit card information for the donation. Often the ASP receives the gift directly, and then later transmits payment to the nonprofit. The complete gift transaction may appear to take place entirely on the nonprofit organization's site, but is in fact resident on the ASP's server.

The companies listed in the table are not all encompassing. I have chosen to consider only companies offering online donation engine services. Other fundraising professionals have done excellent research on the giving vehicles offered through "portal" providers and charity "malls," though the ability to differentiate between them is becoming increasingly blurred.

I prefer the gift vehicles offered by Online Donation Engine Providers when donations appear to be made at your site by donors who have come to your site. Getting traffic to come to your site is its own challenge. Sending people off to another site to make their donation is, in my judgment, a needless step. I believe that one of our tasks, as development professionals, is to make giving easy.

Malls and portals generally make their money by selling advertising. Donation engine providers make their money charging transactions fees, much the same way that credit card companies do.

If your agency is as big as the Red Cross, it would make sense to build your own donation engine. The principal cost savings in using a donation engine provider are in the costs of developing your own online giving engine, and in the (sometimes) reduced credit card rate you may be able to obtain through the provider. Donation engines handle security concerns for you and provide timely reporting.

When donation engine services were first offered they were evolutions of shopping cart software. Transaction fees were often high, and you usually had to have your own merchant credit card account capable of real-time transactions. Now, many donation engine providers allow you to use their merchant account. As competition emerges, the transaction fees, whether they are fixed or a percentage of the gift, have come down.

Apples to apples comparisons are tricky. As you can see from the following table, there is more to consider than just the transaction cost. The least expensive options may or may not include features your organization needs.

If you are looking at installing a donation engine on your site, in addition to verifying that the information presented on the table has not changed, be sure to ask these kinds of questions:

• Can we do the setup ourselves or must we hire a web designer? Do you have a setup wizard?
• How user-transparent is your process?
• Does the transaction appear to take place entirely on the nonprofit's site?
• Explain the various possibilities for customizing the donation option.
• Must we use your service exclusively?
• How long is the contract period?
• What kind of customer support do you provide? During what hours?
• Will the donor see advertising or banners during the transaction?
• How is the information collected from the donor used? Who owns it?
• What kind of donation reports and alerts are offered?
• Tell us about receipts and acknowledgements to the donor.
• Whose name is on the donor's credit card statement?
• Can you accept overseas credit cards?
• Do you have the ability to support automatic debits for recurring gifts?
• What other services does your company provide? Event Registration? Membership renewals? Email Management?
• Are there any other fees?

Most important is that you ask for the url of an organization that is already using the donation engine you are considering. Go to that site, make a donation, learn exactly what your donors will experience.

It takes a lot of time and energy to research online giving thoroughly, but it's worth it because the difference in costs can be significant.

Click here to continue and view the table.

If you'd like assistance or more information, contact someone who really knows both fundraising and online giving:
Marc Lee at 877.320.2299 (toll free).
Marc@AffinityResources.com

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