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by Justin Guinn,
Market Research Associate
Last Updated: December 7, 2016


Whether it’s for an annual appeal, capital campaign or special event, nonprofits in every sector use online fundraising tools to collect donations and connect with supporters. In fact, according to a report on charitable giving, online donations accounted for nearly 7 percent of all contributions in 2014: an 8.9 percent increase over the previous year.

With this guide, you can learn more about how online fundraising platforms can help you handle these important donations.

Here’s what we’ll cover:

What Is Online Fundraising Software?
Common Functionality of Online Fundraising Systems
Key Considerations for Comparing Products
Case Study: Click & Pledge Online Fundraising Software

What Is Online Fundraising Software?

Online fundraising tools power online donation processing. When users arrive on a website’s donation page, they enter credit card billing, contact and other information into an online donation form. When the information in that form is submitted, the credit card is validated and charged.

Donation pages in Kindful

When processing is complete, the system typically sends donors to a confirmation screen and emails them a tax receipt. At the same time, the funds are electronically deposited in the nonprofit’s merchant account, minus processing fees.

Then, donor and contribution details can be reviewed and analyzed using reporting functionality. Reporting tools may be built into the online fundraising system, or users may choose to export the data and use different software.

Some online fundraising tools are more comprehensive, allowing users to:

  • Customize donation forms, such as the visual design, URL and donation amounts
  • Add custom fields to handle “in memoriam” donations and other unique data, including gifts targeted to a specific program
  • Automatically track and process recurring donations and pledges
  • Process payments using multiple methods, including credit card, PayPal or electronic funds transfer (EFT)
  • Create peer-to-peer (P2P) fundraising pages that allow supporters to solicit donations from their friends, groups and social networks
  • Accept and process text-to-give donations

Common Functionality of Online Fundraising Systems

Products can vary from vendor to vendor, but certain capabilities are offered by most systems. The most common are described in the table below:

Custom donation forms Allows users to define donation form-fields and contribution amounts, then generates code to embed it on websites.
Custom campaign pages Helps users create complete campaign websites, including donation forms, videos and images, goal progress counters, supporter comments, social sharing functions and more.
Recurring payments Donors can choose to make automatic contributions—for example, $20 every month or $200 every December—without having to re-enter credit card and contact information each time.
Mass communication tools Allow users to connect with supporters via emails and text messaging.
Social sharing Many cloud-based fundraising platforms include built-in social media publishing functions, which let supporters share campaign pages on Facebook, Twitter and other social channels.

Campaign reporting dashboard in Classy

Key Considerations for Comparing Products

Nearly all online fundraising products let users create custom donation forms, process payments and acknowledge supporters. Here are five other factors to consider when comparing products.

Processing fees. Online fundraising platforms charge transaction and processing fees for each donation. The fee is either a flat rate (e.g., 30 cents per donation); a percentage of the total donation (usually between 1.5 percent and 9 percent); or a combination of both. Some vendors also charge a monthly or annual subscription fee to use the software, whether donations are processed or not.

Tip: To calculate how processing fees impact the software’s total cost, determine the number and dollar amount of donations your nonprofit expects to process through the platform in a month, year or single campaign. Then apply the processing fees for a ballpark estimate.

Social fundraising. Social (or “peer-to-peer”) fundraising functionality is built into many online fundraising systems. It lets supporters create and personalize campaign pages and share them with their friends through social media and email.

If your nonprofit hosts events or uses social fundraising in its campaigns, look for products that specialize in peer-to-peer fundraising and that support individual and team fundraising pages.

White label capabilities. If you’ve made online donations, you’ve probably noticed that some websites redirect you to a donation form on a different URL that doesn’t match the look of the rest of the site. This confuses supporters and can reduce a nonprofit’s trustworthiness. To prevent this, some products let users control the HTML and styles on the page, so donation forms match the core website.

If your nonprofit wants to accept donations on its website, look for “white label” or “custom donation pages” in the vendor’s features and benefits lists. Keep in mind that the skills of a Web designer or developer might be needed for this purpose.

Constituent relationship management (CRM). When someone makes a donation on a fundraising page, the system should automatically email a receipt to the donor. But most nonprofits want to build a relationship with supporters beyond this interaction. If this applies to you, look for systems that retain donor information.

Find out if the online fundraising platform lets you export donor information, or if it integrates directly with a best-of-breed donor management system. This allows your organization to track interactions and communicate with those donors in the future.

Usability. “Usability” refers to how easy it is for people to learn and use a product. If software is confusing and hard to use, employees won’t use it. So it’s important to find a product that is simple enough for everyone in an organization to understand—no matter what their technical ability.

Tip: If your organization relies on many short-term employees or volunteers to facilitate fundraising campaigns, usability is even more important, since there is less time to train them how to use the software. Look for such terms as “drag and drop,” “WYSIWIG” and “turn-key”: These often indicate that a product was built with usability in mind.

Case Study: Click & Pledge Online Fundraising Software

To learn more about how online fundraising platforms can help improve operations, consider the case of Immigration Equality, a New York-based legal services nonprofit that advocates for lesbian, gay, bisexual, transgender (LGBT) and HIV immigration rights. The organization realized many benefits after implementing the Click & Pledge online fundraising system.

In this case study, we explain how the software improved inefficiencies in the organization’s donation forms, multiple payment accounts and donor management tasks.

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