Finance

3 new trends in charitable Finance

In a blow for not for profit finance, people will soon be able to opt out from emails, texts, addressed mail and phone calls from any charity they choose, using The Fundraising Preference Service (FPS).

So, what’s next for charitable finance?

 

How the opt-out service will work

The public will be able to contact the Fundraising Preference Service (FPS) directly to let the FPS know which charities can approach them and how often. 

Once alerted to a consumer’s fundraising choices, the FPS will pass this information on to the respective charities. This process will be backed by the Data Protection Act Section 11, providing legal protection for donors. 

In the meantime, what can be done to minimise the impact of a potential donation downturn from cold calling and direct mail marketing? Here are some options to consider  to make up the shortfall for charitable finance:

 

1. Online donations

The majority of charities are already able to accept ‘digital donations.' Just like non-digital donations, donors can choose to make a one-off gift or make a regular donation, directly via the charity’s website.

However, not all organisations have the technical expertise and internal resources to set this up. But there is a smart solution: hosting brand online platforms, such as JustGiving and Virgin Money Giving. Donors visit the hosting brand’s website, choose a charity and make a donation. It’s already a popular way to give because many find it quick and convenient.

Depending on the company providing the host brand platform and the preference of the charity, there are a number of choices to make on the fees that may apply:

  • One-off set-up fee
  • Monthly maintenance fee
  • A set percentage of each donation taken
  • Credit card processing fees

 

2. SMS text donations

Many donors find giving via SMS text messaging convenient, but 38% of charities don’t accept money via text.

The process for setting up SMS text donations is simple:

  1. The charity decides upon a unique code for the SMS text.
  2. Fundraiser ideally buys a short or memorable phone number (to make it as easy as possible for donors to donate).
  3. The donation amount – typically £3 to £10 – is added to the donor’s mobile phone bill or subtracted from the available balance on a pay-as-you-go phone.

 

3. Bitcoin donations

With no processing fees, another option is Bitcoins,  the digital, electronic currency. Also, due to a virtual ledger system (called a ‘blockchain’), transactions are transparent.

So, supposing you receive bitcoin donations – what do you do with them? You can use bitcoins to make purchases or pay for services online, using a bitcoin digital wallet. This bitcoin database is stored on your smartphone, computer or in the cloud.

If the thought of not-for-profit finance dealing with Bitcoins and digital wallets sounds unlikely right now, consider this: The Royal National Lifeboat Institution and Greenpeace already accept Bitcoin donations