Last editedMay 20222 min read
Direct Debit - also known as ACH Debit or bank debit - helps charities and fundraising organizations reduce their costs of fundraising, and reduce admin.
For charities and fundraising organizations, Direct Debit offers two main benefits:
Reducing the costs of fundraising.
Reducing accounting and payments admin.
Benefit 1 - Reducing the costs of fundraising
Fundraising is a huge cost to a charity, and one that yours should look to minimize. The average charity spends around $0.12 on fundraising for every $1 of voluntary income. The smaller you can make this cost, the more impact you can have.
One way to do this is to reduce the costs of processing donations. Using credit or debit cards typically costs around 2-3% per transaction, plus a flat fee of $0.15-0.30. In comparison, Direct Debit typically costs much less, and GoCardless offers competitive pricing options.
Benefit 2 - Reducing accounting and payments admin
Taking payments by check, cash, and standing order is an administrative burden for charities and fundraising organizations. Particularly as there is no automated reporting system.
In contrast, Direct Debit payments can be completely automated. You’ll always know exactly what has and hasn’t been paid, without checking your bank statement. What’s more, you’ll know as soon as a donor has cancelled their Direct Debit so you have the option of contacting them to try to change their mind.
The Foundation of Hearts were able to collect pledges from 8,000 fans by switching to Direct Debit with GoCardless. They chose GoCardless for three reasons: “it's easy for our team to use, easy for our supporters to use, and the fees are brilliantly low.”
Direct Debit makes giving easier
A one-off donation of $300 is daunting for most of us, while $20 a month seems much more reasonable. Perhaps as a result of this, the average Direct Debit donation can total more than 30 times the average cash donation over the full lifetime of the Direct Debit.
Direct Debit is also cheaper and easier to process than other payment methods, making it more manageable for you too.
With online Direct Debit, potential donors can check out your website and set up payments without the hassle of posting forms or being chased down the street with clipboards.
And, with Direct Debit, payments will be taken automatically each month with no further hassle for your donors - no more writing and sending checks, or rooting around in pockets looking for change, making it more likely that donors will keep giving.
How to get started with Direct Debit
You can access Direct Debit via a bank, a TPPP, or GoCardless. If you would like to find out more about any of these options, you may find our 60 second guide to Direct Debit providers helpful.
GoCardless is a specialist Direct Debit provider. With GoCardless, you can automate your whole payment process and manage everything online. GoCardless offers:
Quick and easy sign up - You can sign up instantly and for free.
Easy and efficient management - You can collect recurring and one-off payments automatically. We manage everything else for you.
Simple, low pricing - See our full pricing plans.
Hassle free sign up for your donors - Potential donors can set up their donation to you instantly, online. The easier this process is, the more likely it is that people will sign up.
For more information on Direct Debit, read our overview of how Direct Debit works. You can also learn more about how GoCardless saves you time and money when collecting payments using Direct Debit.