Thursday, September 8, 2011

How Do You Justify The Cost of Electronic Giving Option?

Some of the church administrators are concerned about the added cost of electronic giving option when they look for ways to boost offertory collections. Even the ones who have been offering online giving option for a year or longer are not sure if it is paying off and delivering the results that were promised by the vendors.

If your members are not contributing to the church 52 weeks (or 12 months) in a year, it makes perfect sense to offer them an option to give electronically on a recurring basis – once a week or twice a month. That way, you will see an immediate return on your investment since you will now be collecting their contributions regardless of whether they attend the church or not. For instance, if a family attends the Sunday Mass three weeks in a month on an average, or 36 weeks in a year, and it gives $50 whenever it attends the service, it is contributing $1,800 a year. If this family switches to electronic giving and sets up recurring giving of only $40 a week for 52 weeks, it is still contributing $2,080 in a year or 15% more than it did before. Many churches that have been offering Online Giving from OSV for a year or longer report their members contributing as much as 30% more since they switched to the electronic giving option due to consistency in giving.

When you compare online giving programs from various vendors, it is important to look at how much flexibility they provide for giving. Some programs are designed for withdrawing funds from the donor’s accounts only once a month, generally on a fixed date. As we all know, not everyone is paid on a monthly basis. In fact, most of the people get their paychecks once a week or twice a month (e.g. 15th and 31st). It is very inconvenient for them to schedule their contributions to the church on a fixed date during the month.

Our analysis of almost half-a-million transactions we have processed in our Online Giving shows that 30% of these transactions are set as recurring contributions. On an annualized basis, the weekly and bi-weekly contributions add up to as much as 40% more than the monthly donations. Such is the benefit of greater flexibility.

A truly cost-effective online giving program should cost no more than 3 to 4% of the total online collections for the church. If offering this option results in an increase in collections in double digits, it more than pays for itself. It is therefore important to look at the cost of this program as a percentage of additional contributions it will bring in instead of a fixed cost per family. Any program that costs you a fixed dollar amount based on total number of registered families regardless of whether these families write checks or give electronically is likely to cost you more than a program with a cost structure tied to number of online givers and their contributions.

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