Credit Cards as a Donation Tool

I have been a member of a national church organization for many years. I was recently notified by a member of my church that my membership had lapsed and was asked if I would consider renewing my membership. I quickly went to the computer, found the organization’s website and, within a matter of minutes, renewed my membership. Using a credit card to make this donation was easy, fast and painless. Because of the speed of the transaction, within a few days, I received a pin that I needed to wear at a member’s function being held at the church. That scenario and current news made me wonder about the role of credit cards for nonprofit donations.

In a very recent Food and Wine blog, it was noted that before COVID-19, cashless payments were booming due to the convenience for customers and business owners. America’s largest grocery chain, Kroger, announced that customers would no longer receive change because of a Federal Reserve shortage of metal money. Kroger now rounds each transaction up to the nearest dollar and donates it to your local food bank. The Federal Reserve noted that the pandemic has disrupted the coin supply chain. In addition to Kroger, Wawa and Giant have followed suit. Walmart has also asked their customers to use credit and debit cards because of the coin shortage. Will this situation be a short-term or long-term scenario?

A Money Under 30 article talked about the future of cash. Some of the primary reasons days of cash may be limited are the rise of electronic payment methods, the fight against crime because criminals love cash and job eliminations in banks and credit unions. The reasons for keeping cash in the monetary system are cash is the best remedy for identity theft, cash provides privacy and cash has a long-standing tradition. A few countries are moving to a cashless society. A survey by the Federal Deposit Insurance Corporation in 2017 revealed that 6.5% of U.S. households have no banking relationship.

If the U.S. moves to a cashless society over time, the use of credit cards will certainly increase for general use and to make charitable donations. A Pay Simple blog that discussed whether your charity should accept credit card donations points out that 75% of consumers prefer to pay with credit or debit cards. According to the article, the credit card donation experience is positive and builds the foundation for additional revenue. Charities should accept credit card donations to improve the customer experience, increase revenue with recurring payments, boost your organization’s brand and reputation, provide easier bookkeeping and eliminate the risk associated with checks that bounce. You know immediately if a credit card transaction is approved.

An article by Finder compares charity credit cards. While credit cards make gifts to support charities if the charities accept credit cards, specific credit cards can support your favorite causes. An easy way to spend for good is through a charity credit card. These affinity credit cards sponsor specific organizations and display charity logos on it. These cards enable a percentage of the amount spent by these credit cards to go directly to your charity of choice. Some examples of specific charity credit cards are the Charity Charge World Mastercard, Susan G. Komen Cash Rewards Visa, World Wildlife Fund Credit Card, U. S. Bank Flex Perks Travel Rewards Visa Card and Defenders of Wildlife Cash Rewards Visa Signature Card.

To find the right charity card, consider the rewards rate and other perks. Make sure the affinity credit card is right for you and meets your needs. They are all different in scope and results. Many charitable cards are more useful to generate awareness than actual donation amounts. A charity card is a walking advertisement about your charity that helps stimulate awareness and greater participation.

Other credit card providers that allow donors to give through special programs, include American Express, Capital One, Discover and Citi. While MintLife notes that fees are involved with credit card donations and charities may not receive the actual total amount given by a donor, it suggests these examples as best credit cards for making charitable donations: U.S. Bank FlexPerks Travel Rewards Card, Blue Business Plus American Express Credit Card, Chase Freedom Unlimited and Capital One Venture Rewards Credit Card.

Credit Cards.com addresses ways a person can give a charitable donation by credit card. It notes donors should watch credit card fees and get their tax deduction. Six popular options for giving by card are as follows:

1. Direct donation via credit card
2. Charitable gift cards
3. Credit card giving portals
4. Charity aggregator sites
5. Donating points, miles or rewards
6. Giving while spending with affinity cards

Pandemic or not, changes in society and future monetary determinations may reduce the use of cash currency in the future. This factor will increase the trend of increasing credit card usage generally and for donations in the future.

With 1.5 billion credit cards, $815 billion credit card debt and 67% of individuals having a credit card, according to a 2019 study by ValuePenguin, I suggest immediately reviewing the possibility of using credit cards and similar vehicles as donation tools going forward. The greater the options a charity can provide for giving, the greater the revenue that is needed by all of today’s nonprofits.