Why ACH/EFT Increases Your Monthly Giving Retention
As I’m putting the finishing touches on the presentations and inputs for the Sustainer Workshop at the Bridge Conference, a colleague sent me this. It was part of the membership renewal she just received on her phone. Can it be any easier?
Why are more and more nonprofits focusing on ACH/EFT (also called direct debits, eChecks)—automatic bank withdrawals from the donor’s bank account?
I see six big reasons:
- It really increases monthly donor retention rates to higher levels.
- It eliminates the need to follow up on expiring or declining credit cards.
- Donors have become more comfortable with online banking, and this is simply the next step.
- More nonprofits have started promoting it.
- More payment processors and online tools offer it, and if they don’t yet, they’re certainly looking to add it.
- Nonprofits know where to find the resources. Check out NACHA for a video and then go this site.
Perhaps you know that I grew up in the Netherlands. Direct debits and bank accounts used to be the only way people paid. It’s a way of life. Thus asking for donations using direct debits was most prominent. And even with the recent GDPR changes and SEPA bank requirements, direct debits are still a popular way to give in many other European countries, as well as Canada and Australia.
The good news is that this is changing! Let me share with you some of the latest statistics here in the U.S. The 2019 donorCentrics Sustainer Benchmarking Study Summit shows that organizations with mid-level size monthly donor programs have an impressive number of sustainers giving monthly via ACH/EFT at 18%!
But even 5% is a great start and definitely something to strive for. That’s 5% of your monthly donors you don’t have to follow up on as their monthly gift will start coming in until they cancel, move and change banks, or pass on.
If you’ve been following me for a while, you already know that monthly giving is not a one-shot deal. It’s an ongoing promotion of the concept. It’s literally planting of the seeds and watering. It’s always reminding donors how easy it is to give monthly and how easy it is on their budget.
But with ACH/EFT, you’ll have some additional talking points: It’s safer than credit cards, and it’s a lot cheaper for your organization to process. More money will go to support your mission!
Even if your online processor can’t handle ACH/EFT yet, you can create an online form to send when donors ask for it and to download on your site. See here for a downloadable customizable form and the ACH authorization rules and guidelines, courtesy of NACHA.
Check out how you can add giving via ACH/EFT to your options online and offline. Then once you have your systems in place, you can start working on converting your monthly check statement donors if you have them and your credit card sustainers to give monthly via ACH/EFT. You can really make your monthly donor program soar to even higher levels. As monthly donor retention percentages increase, the money raised increases as well.
Erica Waasdorp is one of the leading experts on monthly giving. She is the president of A Direct Solution, a company serving nonprofit organizations with fundraising and direct marketing needs, with a focus on monthly giving and appeals. She authored "Monthly Giving: The Sleeping Giant" and "Monthly Giving Made Easy." She regularly blogs and presents on fundraising, appeals and monthly giving — in person and through webinars. She is happy to answer any questions you may have about this great way of improving retention rates for your donors.
Erica has over 30 years of experience in nonprofits and direct response. She helped the nonprofits she works with raise millions of dollars through monthly giving programs. She is also very actively supports organizations with annual fund planning and execution, ranging from copywriting, creative, lists, print and mail execution.
When she’s not working or writing, Erica can be found on the golf course (she’s a straight shooter) or quietly reading a book. And if there’s an event with a live band, she and her husband, Patrick, can be found on the dance floor. She also loves watching British drama on PBS. Erica and Patrick have two step sons and a cat, Mientje.