Best Payment Solutions for Charities

In these financially beleaguered times, with the cost of living crisis and high inflation, charities need to eliminate barriers to payment, making it as easy as possible for donors to send, monitor and control their donations. In the battle for every donated penny, charities must reduce operational spending so that as much capital as possible goes towards helping the cause close to their donors’ hearts. Especially as many domestic and corporate donors are keeping a closer eye on the purse strings and cutting back on non-essential spending, and the slightest friction could give them pause.

Choosing a payment solution for your charity

Choosing the right payment solution for your charity is vital, and several factors must be considered. Not only do you need to consider if the flexibility is present for donors to contribute through regular or impromptu donations, but think about integrations with other platforms, the types of payments available, the level of time investment required, and what support is available. Your chosen payment solution should also keep processing fees to a minimum to prevent eating into the funds you're trying to raise. 

Let’s take a closer look at some of the leading payment solutions available for charities, including:

• GoCardless - cost-effective donation collection and over 350 integrations with business and accounting software packages.

• Charity Engine - offers an all-in-one solution. 

• TrueLayer - offers a donation app.

• Stripe - known as a card payment specialist

• Opayo - a suitable option for charities requiring both online and offline payments.

GoCardless

Bank payments, particularly Direct Debit, often offer several advantages over card payments for businesses and consumers. They reduce the risk of failed transactions due to card expiry or cancellation, offer lower transaction fees due to a more efficient funds transfer process, and provide more reliable cash flow due to predictable payment schedules. 

Managing cash flow is critical for charities, as unpredictable or failed payments can severely affect their ability to function. GoCardless is a leading Direct Debit provider, offering an efficient, user-friendly, and cost-effective solution. With its low transaction fees, easy setup, and automated processes, GoCardless removes the administrative burden of managing donations, freeing up valuable time and resources. It also enables charities to quickly set up recurring donations, providing a more predictable income stream.

Furthermore, the platform's security and compliance features give charities and donors peace of mind regarding the safety of their transactions. GoCardless is integrated with several key business and financial management platforms, including:

• ZenDebit

• TotalGiving

• Givecloud

• eTapestry

• Donorfy

• Charity Checkout 

Charity Engine

Charity Engine is a groundbreaking fundraising platform dedicated to optimising charitable donations. Utilising a combination of crowdsourcing and philanthropy, it leverages idle computing power from its users to generate funds. Users download the Charity Engine app onto their devices, allowing the surplus processing capacity to be sold, with the proceeds donated to a host of good causes. While an innovative solution, it may not cater to those who prefer traditional and proven donation methods, such as bank transfers and direct debits.

TrueLayer

TrueLayer acts as a conduit between financial institutions and applications, providing an interface that securely connects apps with users' bank accounts. This fintech company is dedicated to accelerating financial innovation by making it easy to share banking and other financial data. While it supports direct transfers from bank accounts, its primary focus is data sharing, which may not align with all charities' needs.

Stripe

Renowned for its comprehensive suite of online payment processing tools, Stripe offers a robust platform for businesses, including charities. Its core product facilitates credit and debit card transactions alongside other digital payment methods. Stripe's user-friendly design and wide-ranging capabilities make it a powerful tool for charities, but it predominantly centres around card transactions, an option that comes with its challenges. 

Opayo

Opayo is a payment service provider that supports various transaction methods. It offers an extensive range of solutions tailored to businesses of all sizes, encompassing everything from card payments to phone transactions. While it provides flexibility in payment options, Opayo’s diverse offerings go beyond direct bank payments and direct debits, which may introduce complexities not pertinent to some charities.

Key takeaways

Lower transaction costs and failed transaction risks: Bank payments such as Direct Debit typically offer lower transaction fees and reduced risk of failed transactions than card payments. This is advantageous for charities, ensuring more reliable and cost-effective donations - essentially, you can collect more donations at a lower cost.

Streamlined cash flow: Direct Debit provides a more predictable cash flow due to its recurring nature. This predictability is crucial for charities as it aids in effectively managing funds and planning.

Ease of use and integration: The ideal payment solution for charities should offer easy setup, automated processes, and comprehensive integrations with crucial business and financial platforms. This can significantly alleviate administrative burdens, freeing up valuable resources.

Secure transactions: Security is paramount for any transaction. Charities must choose a payment solution that provides robust compliance and security features, ensuring the safety of donors' transactions.

Opting for proven methods: While innovative solutions can be beneficial, they may not always cater to payer preference and those preferring traditional and proven donation methods such as Direct Debit and bank transfers. Therefore, charities should consider their donor base when selecting a payment solution.

Case study

The Norwegian Refugee Council (NRC), a humanitarian NGO that assisted almost 12 million people in 2020, has utilised GoCardless as its primary payment solution to ensure a majority of its revenue reaches the intended cause. GoCardless has significantly streamlined NRC's operations, handling 35% of global bank-to-bank payments and 90% in Sweden, Germany, and Austria.

The transition to GoCardless, led by the GoCardless Premium Customer Success Team, was done smoothly without losing a single mandate, with the well-defined API facilitating data and payment flow, easing the migration process.

GoCardless's Success+ solution has proven invaluable in managing failed payments. It uses machine learning to intelligently retry payments at optimal times, leading to a 7% increase in recaptured payments. The automation also reduced time spent chasing failed payments by 64%.

The GoCardless platform has cut the time spent on payment administration by 50 - 60 hours monthly and improved donor relationships. GoCardless's partnership with NRC extends beyond providing payment solutions; its customer success team works closely with the NRC to optimise its payment processes, allowing the organisation to focus on its mission better. Brage Storkerson, Head of Donor Systems, noted,

We can help

GoCardless offers tailored payment solutions for charities, ensuring seamless donation collection for local and international organisations. By automating the collection of one-time and recurring donations, we aim to alleviate the administrative burden, cutting down manual tasks and errors. Our user-friendly platform makes it quick and easy to get started, with award-winning support, and requires no long-term contracts.

You can set up instant, one-off, or recurring donations in the merchant dashboard in just a few clicks, and GoCardless automatically creates and sends all the necessary forms to donors. You can also connect to GoCardless via over  350 partner apps, such as Xero and Quickbooks.

The flexibility to adjust donation amounts, dates, and frequency without requiring new authorisations further eases your cash flow management. GoCardless is a streamlined, effective payment solution, helping charities to focus more on their mission and less on administration.

Frequently asked questions

How do charities set up Direct Debits?

Charities can establish Direct Debits, a vital component of regular giving, by leveraging the services of a reputable payment processor such as GoCardless. This process involves signing up for a GoCardless account, integrating it with your charity's website via the company's user-friendly API or pre-built integrations, and setting up a secure, dedicated payment page. This page will facilitate your donors' ability to set up Direct Debits, which will be automatically debited from their accounts on their chosen schedule. GoCardless ensures donors' financial details remain secure, complies with all local regulations, and streamlines the recurring payments process, making it an excellent choice for charities. This solution can contribute to steady, predictable revenue streams crucial for charities to sustain and expand their philanthropic endeavours.

Is GoCardless free?

GoCardless offers a tiered pricing model designed to meet its clients' diverse domestic or international needs, making it quick and easy to get started, and with no contracts or long-term commitment required, there’s no risk. You can set up instant, one-off, or recurring payments in the merchant dashboard in just a few clicks, and GoCardless automatically creates and sends all the necessary forms to donors for you. You can also connect to GoCardless via over 350 partner apps, such as Xero and Quickbooks.

What is better, Stripe or GoCardless?

Indeed, comparing Stripe and GoCardless as charity payment solutions presents a nuanced landscape. Both offer robust functionalities but shine in different aspects. Stripe provides a broader range of payment options, including credit cards, digital wallets, and international payments, supporting a global donor base. However, GoCardless focuses on bank-to-bank transactions via Direct Debit, presenting a cost-efficient model that can potentially enhance the financial sustainability of charities. GoCardless typically offers lower transaction fees than Stripe, making it advantageous for recurring donations—an integral part of charity funding—thus subtly shifting the balance in its favour. As charities typically operate on tight budgets, GoCardless's cost-effectiveness may present a more sustainable option for the long term.