The concept of layaways was huge in the retail space for decades but faded away as store credit cards became prominent. Now, that same concept has made a comeback with buy now, pay later service providers offering customers the option of making a purchase, but paying it off with biweekly or monthly installments without a credit check and often interest free. In fact, the number of people using these purchasing services has grown 48% in the last year, according to the “2021 CauseVox Pledge Now, Pay Later Study.”
So, what does this have to do with nonprofits? CauseVox has brought that same idea to fundraising with the development of its Pledge Now, Pay Later feature, which it cites as being the first on the market in the nonprofit space. The new feature allows donors to make a pledge to a nonprofit, but pay that donation in multiple installments, making it more affordable for the donor and potentially turning Millennials and Gen Zers into major donors.
“In a short amount of time, there’s been a transformative shift in donor preferences due to buy now, pay later services, such as Affirm, Afterpay, and Klarna,” Rob Wu, CEO and co-founder at CauseVox, said in a statement. “Donors are valuing convenience, ease of use and transparency in making a donation. CauseVox’s Pledge Now, Pay Later is the answer to the changing way of how Gen Z and Millenials pay, while easily empowering nonprofits to increase the charitable donations they receive.”
CauseVox learned, via surveying 400 individuals in North America for its study, that nonprofits can raise more by offering installment plans since 81% of donors who already use these services for purchases would prefer installment plans when it came to charitable giving — and those donor preferences hold true across all demographics. CauseVox also found that 46% of respondents have used a buy now, pay later service recently while 63% would give higher amounts and give more often if they could pay in installments.
For Pledge Now, Pay Later, donors can select from predetermined donation amounts or input their own amount before scheduling elements like frequency and duration of the installments. The first installment is immediately billed and the remaining installments are scheduled based on the donor’s selections. Each donor also automatically receives an email receipt after each installment with updated information on the pledge and a secure link to manage payments.
This feature can be used on donation forms or hosted donation pages, peer-to-peer fundraising pages, crowdfunding or virtual campaigns, event ticketing forms and more.
“By empowering nonprofits to take donations in the fastest-growing way donors prefer, we allow charities to easily raise funds with less effort across all of their fundraising initiatives,” Jeff Chang, chief technology officer and co-founder at CauseVox, said in a statement.