Low Rate Payment Processors: ACH for Nonprofits is the Way
Online giving has made it easier than ever for donors to support the causes they care about. And the easier you make it for donors to give, the more likely they are to do so—again and again.
That’s why offering multiple ways to give on your donation page matters.
Credit and debit cards might be the go-to for many supporters, but eChecks (also known as ACH payments) are a really great—and smart—option to include.
They’re secure, easy for donors to use, and even better?
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What is ACH payment processing?
Put simply, an automated clearing house payment (ACH), also known as an electronic funds transfer (EFT) or an eCheck payment, is a digital payment that is taken directly from a bank account.
Unlike credit card transactions, which involve multiple intermediaries, ACH payments move funds from a donor’s bank account directly to your nonprofit’s bank account.
When used on a nonprofit’s website, a donor is prompted to type in their routing number and checking account number into the form. EFT payments are processed more quickly than paper checks and are a great option for nonprofits since these types of payments are easy for donors to make online.
For a full breakdown on all things nonprofit payment processing, including Q&A with payment experts, check out this 4aGoodCause webinar.
What are eChecks?
An eCheck, or electronic check, is a digital version of a paper check. Essentially, eChecks are a form of ACH payment. (At 4aGoodCause, we offer eChecks through Authorize.net.)
An eCheck authorizes funds to be debited from a donor’s bank account and transferred to your organization’s account through the ACH network.
This process eliminates the need for physical checks, offering a faster and more secure transaction method.
Most credit card processing fees are between 2-3%. Authorize.net, one of the top eCheck processors, charges only 0.75% of each transaction with a $10 per month minimum.
The majority of ACH or eCheck processors charge fees less than 1% for processing, making eChecks a better option than credit cards or third-party services for nonprofits accepting donations.
Even newer digital payment processing solutions like Stripe can be more expensive. Stripe offers discounted processing fees for qualifying nonprofit organizations (about 2.2% + $0.30 per transaction for most credit and debit cards, with American Express at 3.5%).
Let’s take quick look at the math:
If a donation of $500 was made to your nonprofit via a typical VISA credit card payment, you would receive only $487.50 of that donation after a 2.5% credit card processing fee. (Stripe would also be about the same.)
If $500 was donated by eCheck, your charity would receive $496.25.
A few dollars might not seem like much money but the larger the donation, the larger the amount of money taken for processing fees.
EFTs are a great option for nonprofits who want to get the most out of their donations.
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2. A safe payment option that reaches a wider audience
Another bonus? eCheck payments have become popular because they’re recognized as a safe alternative to putting a paper check in the mail.
Paper checks place a donor’s routing and checking account number in plain sight and the check may be touched by as many as 20 human hands before clearance. eCheck payments are submitted in a secure, encrypted environment where only the account holder has access to the full account numbers.
ACH payments can even automate the process for those donors who participate in monthly giving.
In addition to being safe, eCheck payments are available to a wider range of people since checking account holders outnumber credit card holders. An estimated 84% of American consumers have at least one credit card, while 94% have a checking account.
3. ACH is a great online payment option for monthly giving
ACH is exceptionally well-suited for monthly giving programs. In fact, eChecks hold the highest donor retention rate out of all types of monthly giving payment options.
Since eChecks are pulled from bank accounts, donors can set up consistent giving settings that stay in place as long as they choose to continue using that account.
Plus, the lower transaction fees ensure a higher percentage of each recurring donation goes to your cause, making it more cost-effective for both the donor and the nonprofit over time.
Try our monthly giving calculator to see how much you can raise.
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Also, credit cards expire over time—bank accounts don’t. While donors can set up a consistent giving schedule with their credit card, expiration of the card can cause bumps in the giving process.
This means you must track down the donors to get card updates such as new expiration date, new card number or address change.
⭐️Ready for consistent donations with less planning hassle?Monthly givers have a 83.6% average retention rate. Discover how 4aGoodCause helps you build a loyal base of recurring donors who are passionate about your cause.
4. Broader donor reach
By offering ACH as a payment option, you can cater to a wider demographic. (The more payment methods you offer, and the more you reduce barriers to giving for your donors, the more likely you will warn those donations.)
Donors who may not have credit cards, or those who simply prefer direct bank transfers, are able to contribute easily via the ACH method.
This inclusivity ensures that your organization can accept online donations from more supporters, going beyond digital methods like credit and debit cards, PayPal, Apple Pay, or Google Pay.
Implementing ACH processing involves a few straightforward steps to ensure a smooth transition and effective integration.
Choose a reputable ACH processor
Integrate with your existing systems
Educate your donors
1. Choose a reputable ACH processor
Look for providers that specialize in nonprofit services, offer transparent pricing, and have strong security protocols. Verify their compliance with NACHA rules and data security standards, such as PCI DSS, if they also handle credit card data.
For a quick video on accepting ACH payments, check out this one from our 4aGoodCause partners at Authorize.net:
What is an eCheck?
2. Integrate with your existing systems
Ensure the chosen ACH processor can integrate seamlessly with your current donor management system, fundraising platform, and accounting software.
This integration is crucial for streamlining operations, automating reconciliation, and maintaining accurate donor records.
If you’re a 4aGoodCause client, this is really easy, and your donors can choose eChecks (we label it Bank Transfer for donors) as a payment method through your 4aGC donation pages. Take a look at this simple ACH help guide to learn how to enable it on your account.
3. Educate your donors
This is the most important step to benefitting from the lower payment processing rate of echecks and ACH: Let your donors know it makes the most of their donations.
All it takes is some smart messaging. You could send out a yearly reminder about making contributions via ACH, and then at the bottom of every ask going forward, you could include a footnote or some “fine print” that explains processing fees are less when eChecks are the chosen payment method. (Include this on your direct mail campaigns, too!)
Clearly explain the benefits, such as lower fees meaning more impact for their donation, and provide simple instructions on how to set up an ACH payment if needed.
If you’re a 4aGoodCause client, you can also set eChecks as the default payment option on your donation forms.
Raise more—stress less: 4aGoodCause makes payment processing easy
Payment processing can be really confusing. 4aGC makes it simple for nonprofit organizations like yours.
We know extra time and resources are scarce, so our team built the easiest-to-use donor CRM and fundraising platform (all centered on monthly giving!), making it easy to jump right in and raise more with less stress.
Whether you want to bring your own payment processor or choose our built-in solution, we make it easy to get started—and even easier to understand your fees.
Our platform is designed to simplify processing, offering competitive rates and seamless integration with your existing systems.
And donor tips? You keep 100% of those. They go to your mission, not ours.
Ultimately, we ensure that you’re supported by all-in-one fundraising tools, so more of your donations directly support your mission, while providing a secure and convenient experience for your donors.
Ready to optimize your donation processing?
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In my opinion, the best nonprofit payment processing system is one that’s easy to use and easily integrated across your tech stack. I built 4aGoodCause to offer just this! Check out our nonprofit payment processing options to see how simple and flexible they are.
As far as the best payment method for nonprofits, I’d argue it’s eChecks / ACH, because your donors don’t have bank accounts that expire like credit cards—and the payment processing fees are much lower than other giving methods.
Can donors cover payment processing fees?
Donors can cover fundraising platform and payment processing fees through donor tips. This is a common feature in many fundraising platforms, including 4aGoodCause. The difference with 4aGC donor tips is that:
They’re optional
Your organization keeps 100% of the tips
Unlike other fundraising platforms, we don’t keep any donor tips you receive. (Hooray! That’s the way it should be!) Any tips you’re given go straight to your organization and can help offset payment processing costs.
Do nonprofits have to pay payment processing fees?
Yes, nonprofits have to pay payment processing fees—whether that’s for credit cards, debit cards, digital wallets, or some other form of secure online payment.
However, some payment processors offer discounted fee rates for nonprofits.
How can nonprofits find low-cost ACH payment processors?
The best secure payment gateway for your nonprofit will depend on your nonprofits specific needs. However, at 4aGoodCause, we’re a big fan of Authorize.net (powered by VISA) and we partner with them directly.
Their eCheck processing fee is lower than other types of payment methods (like credit cards), at just 0.75% for each transaction with a $10 per month minimum.
What’s the best payment method for nonprofit monthly giving programs?
Hands down, ACH / eChecks are the best payment method for monthly giving programs.
Because bank accounts rarely change, while credit and debit cards expire or get replaced, ACH donations drawn directly from a donor’s bank account tend to be more reliable over time.
Plus, the processing fees are lower than credit and debit cards.
What payment methods does 4aGoodCause offer?
Offering a variety of secure online payment methods for your donors is one of the smartest moves you can make—and we’ve made it super simple inside 4aGoodCause.
We offer:
DAFpay
ACH bank transfer
Invoice Me
Apple Pay
Google Pay
Paypal
Discover, Mastercard, Visa, American Express, and more
Our software platform also integrates with Bloomerang, Blackbaud, Salesforce, Little Green Light, Double the Donation, and many more! See all integrations.
Another bonus?
4aGoodCause donation pages go beyond recurring payments for monthly giving programs and one-off fundraising campaigns with additional functionality; you can use them for event ticketing, P2P fundraising, in-person donations with QR codes and text-to-give. See all the possibilities with our fundraising pages.
Ronald Pruitt
Ronald is the President and Founder of 4aGoodCause, the fundraising CRM that makes recurring, monthly giving a breeze for small nonprofits.
For over 25 years, Ronald has had the joy of doing what he loves, building online solutions that make a difference in the world. He’s helped raise millions of dollars online for small nonprofits across the country. Connect with Ronald on LinkedIn.
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