If you’re starting to get involved with your monthly giving program, you will come across some of these terms: EFT, ACH, Automatic Bank Withdrawal, Direct Debit.
They all stand for the same thing: EFT is Electronic Funds Transfer, ACH is for Automated Clearing House. Automatic Bank Withdrawal is probably the best lay term to use and EFT the acronym.
The donor provides you with their bank account information and authorizes you, the organization, to then ‘draw’ from that bank account the amount at a certain frequency. The great news is that once you have the Bank Authorization set up, you’re good to go and you’ll be able to draw the money as long as the donor does not cancel.
Getting a donor to commit to a monthly gift via EFT is the ultimate! The retention rate is the highest of all types of monthly giving. Donors don’t usually cancel their bank accounts, there is no expiration date and no cards to change or updated.
As some of you may know, I hail from the Netherlands, one of the countries in Europe where donors are very comfortable sharing their bank account information and setting up monthly gifts through EFT (they call it direct debit) is the norm. In fact, the bank system there is so sophisticated that many donors don’t even have credit cards. Pretty much the total opposite from what we see in this country.
BUT, that is changing here. We now see that most utility companies, newspapers, car payments and the like have probably already asked you to pay automatically via your bank account. Many of us already use PayPal linked to our bank accounts. We’re all getting more comfortable with it. Partly because it’s frustrating to have to change things every few years when our card expires or if our card changes for some other reason (like we’re seeing now with the new chip cards being issued to you).
This trend towards EFT is GREAT NEWS for nonprofits.
If more monthly donors are willing to give us their bank account information and set up a monthly gift through EFT, that means that they are going to retain at higher levels and they’re going to stay with us longer and give more money! Jippeee! Isn’t that what we’re striving for?
The not so good news is that getting monthly donors to commit via EFT is still he HARDEST to accomplish (at least in this country). But that shouldn’t stop you from trying!
EFT is getting more and more attention. If you have donors who are already giving monthly to you now, why not try to convert them to EFT? They trust you, they’re already comfortable with giving monthly. The hardest sell is making them to commit to giving monthly. You’ve already done that. Now you’re converting them from credit card to EFT.
Some organizations with considerable monthly giving programs via credit card are now very much focused on trying to convert those credit card monthlies to EFT monthlies. It helps save money on credit card fees. Money you can use for your mission and programs. You can certainly convert them by phone and email and direct mail. Most banks still require you to have a written form but not all. In some cases, if you’re using secure donor base systems such as DonorPerfect with its SafeSave processing, you’ll be able to take the donor’s bank account information online and start drawing every month within very short order. All you have to do is confirm their commitment.
But the easiest is of course to sign up monthly donors via EFT to begin with. Then you’re golden and your retention rates are the highest possible.
So, offer the EFT option in your appeals, via phone, mail, online. Post a form online donors can print out and mail in, so you have their commitment in writing.
Like anything with monthly giving (and fundraising), if you ask them, they will come. Make it easy and they will come. Use everything in your power to convince as many donors to join your monthly giving program. You’ll be so much better off in the long run!
If you’d like to find out how to implement EFT for your organization, just contact the Monthly Giving Help Line . It only takes one extra new monthly donor to pay for it! You can’t beat the price.
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