Thursday, 23 May 2024
Thursday, 23 May 2024

Safeguarding donation value for faith-based organisations

FAITH-based organisations have historically relied heavily on cash donations from worshippers and while a proportion of regular attendees and community members have transitioned to direct debits and standing orders, the decline in cash usage has devastated overall contributions, especially at weddings, funerals and external fundraising events. But given the risk of cash donations to theft, fraud and error, a move to convenient contactless card donations could have a silver lining, as Elroy Fernandes, Managing Director, Dona Donations, explains.

Cash Contributions

With cash used for just 15% of payments in 2021, it is simply no longer viable for faith-based organisations to rely on traditional ways of generating income. The challenge is not simply in ensuring regular worshippers make donations during services, but in capturing the significant additional donations provided by friends and family during emotional events such as baptisms and funerals.

People still want to donate but when so few carry cash it is vital to provide a simple, convenient alternative. With 97% of the UK population now holding debit cards, the use of self-service card donation terminals is fast becoming the efficient way for individuals to donate.

These terminals can be located in stands or on tables in convenient places around the place of worship. The simple design allows a faith-based organisation to prompt donors with different donation value options, an approach that particularly helps those unfamiliar with a place of worship to make a donation decision. And, with a one-time Gift Aid registration, faith-based organisations enjoy a far higher level of Gift Aid on donations than typically achieved with cash, adding significantly to overall income.

Different Approach

Contactless payment terminals offer a different experience from the traditional cash basket handed around during a service. Indeed, organisations are encouraged to request donations before or after the service, rather than during the traditional time for collection – in part due to the small ‘bleeps’ that ensure sight-impaired people know their donation has been processed, which can be a distraction.

Any resistance to this small change within a service is typically rapidly overcome by the sheer ease of use and flexibility of this donation process – and its quantifiable value to the organisation. For example, faith-based organisations accepting contactless donations have seen the average value increase to £13, from an anecdotal figure of approximately £2 – £5 in cash, or whatever loose coinage is on a person at any given time. Contactless donations, therefore, help the organisation to capture donations from all visitors – from summer tourists admiring a historic place of worship to individuals using the buildings for other community activities. Indeed, because the terminals can be unlocked and, with the addition of a SIM card, used for other fundraising, such as fetes and community events, that would previously have relied on cash transactions, they can provide a valuable source of donation income.

Preventing Loss

The other key benefits of this move away from cash is the significant reduction in the risk of opportunistic theft, internal fraud and error. The times of religious services are widely published, which means potential thieves know exactly when to target a building. With the cost-of-living crisis, anecdotal evidence suggests more faith-based organisations have experienced problems with attempted theft.

In addition, instances of internal fraud are sadly widespread because cash is so hard to track. While churches have lost hundreds of thousands of pounds to theft undertaken by trusted individuals, including treasurers, in many cases it is a simple error in either counting the cash or updating a spreadsheet that can lead to confusion.

The use of digital collection terminals completely eradicates this problem. The digital donation information is accurate and verified and automatically updates the financial system in use. In addition to saving time for volunteers in counting cash and updating spreadsheets, the organisation also has accurate reports for the Charities Commission. With the addition of simple, electronic Gift Aid declarations, faith-based organisations can enjoy a far simpler and more accurate process for managing donations.

Conclusion

Cash-based giving will continue to decline – especially across the younger generations – and it is therefore vital that faith-based organisations provide a convenient alternative. Contactless payment terminals offer a simple solution to replace all cash interactions that are easy to use and understand for both donors and, critically, the volunteers that keep faith-based organisations running.

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