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The Demise of the Cheque

Rumours have circulated for years and every now and then a story makes it into the press about a bank who refuses to deal with a charity’s cheques or sends them to a central sorting office.  Over the last few months stories have been cropping up about the demise of the cheque and now it seems that day has come. The Payment Council, the body responsible for setting strategy for UK Payments is considering the possibility of phasing out cheques by 2018.

Cheques have been on the decline for years – the latest statistics show a drop from 11 million in 1990 to less than four million in 2008. With organisations such as the NSPCC claiming only 1% to 2% of donations are cheque based – is it really such a tragedy?  In this economy, charities are loathe to turn down any kind of donation regardless of whether it is a standing order, cheque or cash donation.

So why are charities still so reliant on a costly and cumbersome payment method? Many charities point out that they continue using this payment method because it’s what donors want. The Donkey Sanctuary reports that a whopping 70% of its donations come in via cheque. Is this down to online-phobic donors? Or hard to use websites that make giving online a massive challenge? The banks argue that the charitable sector should be finding more tax efficient and cost effective way for donors to give. Giving online is one of the ways that charities can do this.

With 2018 only 9 years away, charities needs to begin the campaign to convert cheque writing donors into online donors. So how can charities do that? We have a few ideas….

1.    Explain to donors that more money goes to the charity when a gift is made online

2.    Provide step-by-step instructions so that non-web savvy donors understand how to use your donation page

3.    Provide simple to understand explanations about security features on your website so that reluctant donors feel more confident using your website

4.    Many donors continue to give cheques because they do not have internet access. Be prepared to take payments over the phone and make sure your fundraisers trained to take donor card details over the phone? Are they recording the information directly into a payment portal to ensure that payments are processed in real time while the donor is on the phone?

5.    Can you setup Direct Debits online or over the phone? Are your fundraisers setting up the Direct Debit right away and checking bank details with an online tool?

6.    Many cheque writing donors actually enjoy writing out a cheque to their favourite charity. How can you make your web form more personal? Are you following-up online gifts of a certain size with a personalised thank you letter? If donors make a large online gift are you calling them to thank them personally? Can your donors share why they’re making a gift on your donation form?

7.    Start using direct mail, newsletters and telephone campaigns to educate your supporters about the upcoming change. Let them know the advantages of switching to new payment methods.

If you have any questions about online donations or Direct Debit, please email info@rapidata.co.uk

Posted by Scott Gray on 30/11/2009 within Fundraising

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