One of the biggest pain points that nonprofits have to deal with is fundraising. Maintaining a consistent flow of donations and financial contributions can be extremely difficult without an effective strategy and high-quality software tools in place. If nonprofit organizations fail to give these matters their proper due, they may see their stream of donations dry up, making day-to-day operations far more difficult.
Fundraising issues affect both organizations that rely on private contributions and those that receive government support. Many government bodies struggle to pay nonprofits on time and in full. According to a National Council of Nonprofits study, 45 percent of responding nonprofits reported that government agencies are frequently late with their payments. Furthermore, the average state government owed more than $200,000 to each nonprofit it worked with.
“Digital currency offers a quick and easy way to donate.”
Financial issues continue to be a significant cause for concern among nonprofits. A 2014 survey from the Nonprofit Finance Fund found that 28 percent of participants had a deficit at the end of their 2013 fiscal calendar. In response to these issues, many nonprofits are looking for opportunities to diversify their funding sources and bring in new contributions. Thirty-one percent of nonprofits said that they would change their primary avenue for raising money within 12 months of the survey.
Clear roadblocks for donors
In this climate, it’s critical that nonprofits take advantage of every opportunity to increase their funds and contributions. One way that organizations can improve their funding efforts is by removing any barriers or bottlenecks for potential donors. Digital currency offers a quick and easy way for interested parties to donate to their charity or nonprofit of choice. Although many nonprofits have traditionally received cash or check payments as contributions, neither is ideal. It takes time for checks to be deposited, and there may be issues with them clearing. Furthermore, payments sent through the mail could be easily lost, representing missed opportunities for additional funding.
Digital currency, on the other hand, can be transferred almost immediately, eliminating these types of issues and putting critical funds in the hands of nonprofits. Organizations in this sector are starting to take notice of digital payment services and their benefits, using such platforms with greater frequency. According to the Nonprofit Technology Network’s 2014 Nonprofit Benchmarks Study, online donations are on the rise, increasing 14 percent in 2013 alone.
Tap into new funding sources
Finance consultant and TechSoup contributor Dave Landry, Jr. noted that by embracing digital currency platforms, nonprofits could appeal to an entirely new donor base, further increasing contributions. For instance, younger demographics may be more likely to prefer online payment systems over traditional avenues.
“For people who might not have donated to a nonprofit or charity before, the post-wallet economy offers all sorts of new opportunities,” Landry wrote. “For nonprofits, this whole new world can make doing good easy and even fun for people.”
Another benefit to digital currency is that it helps cut down on waffling from potential donors. When weighing the prospect of making a contribution to a nonprofit, an individual may be discouraged by the amount of effort needed to complete the transaction. Filling out a check, addressing an envelope and heading down to the nearest post office to mail a donation can be a time-consuming process. Ultimately, an interested donor may decide it is not worth the effort. Because digital payments can be made almost instantaneously, there is less risk of a potential contributor walking away.
When considering payment platforms, nonprofit organizations may want to deploy custom software solutions. Many e-wallet services are designed with private businesses in mind and may not properly consider the needs of nonprofits. By working with a specialized software consulting group, organizations can obtain software that has been created specifically around their needs and demands. This way, they can address any number of unique concerns like transparency, compliance and reporting. Furthermore, payment apps can be custom built with a donor audience in mind to help encourage conversions, resulting in more funding overall.
Even in circumstances where IT budgets are tight, nonprofits can benefit tremendously by deploying a digital currency platform geared toward their specific needs.