Instant Giving: How Next-Gen Payment Can Empower Charity Donations
The ongoing global economic downturn is placing additional stress on organisations that collect charity donations working in homelessness prevention, mental health support, and international aid, among others. As a result, charities and non-government organisations (sometimes known as the ‘third sector’) are facing immense pressure to meet the needs of communities that rely upon them.
Among these pressures are the changing ways that people send and receive money. Specifically, there’s a rising need for more modern charity payment solutions that reflect the rise in contactless payments, digital wallets and mobile banking. In this article, we’re looking at the changes in how money moves across the third sector and what charities can do to adapt and collect donations more effectively. Read on to learn more.
How charity donations are evolving
1. Benefactors’ shifting payment preferences
While payment preferences are always changing, one trend is clear: cash is in long-term decline. Pan-European data shows demand for physical currency is decreasing in favour of digital wallets, card payments and bank transfers. In fact, in 2021, cash accounted for just 25.6% and 2% of offline and online spending, respectively.
Charities have noticed the trend, too. Cash was the preferred way to give money to charity in 2019. Yet, third-sector organisations found only two in ten donors were using cash just two years later. While POS devices and card readers have become common for in-person transactions, online charity donations are also on the rise. More broadly, surveys show 48% of people prefer to donate through digital channels. This means that third-sector leaders need to explore new payment solutions.
2. Rising interest in unconditional cash transfers
Similarly, the form of charity donations is also changing. It’s becoming increasingly apparent that unconditional cash transfers (physical or digital) are an effective way to support vulnerable or developing communities.
This stands in contrast to the traditional charity donation model of providing essentials like food, clothing or medical support. Communities may not necessarily need such goods at that particular moment, so they’re sometimes of limited benefit. In contrast, cash is highly liquid. As a result, it allows vulnerable communities to buy goods or services according to their needs as they see fit.
For example, research has shown unconditional cash transfers reduce the odds of developing illness by 27% in the short term. We see similar outcomes over longer periods. Studies have shown unconditional cash transfers can promote psychological wellbeing, food security and educational outcomes. What’s more, cash donations create a multiplier effect on the wider economy. This means cash-based charity donations help both individual recipients and their local community.
How instant payments can improve online charity donations
Given all of the above, it’s clear third sector organisations need to evolve their charity donation model. Namely, towards digital payment systems that make collecting charity donations easier and more effective via unconditional cash transfers. However, charity organisations can go even further by harnessing the power of instant payments. In times of crisis, getting support to vulnerable people quickly is essential. Doing so means helping communities recover from trauma, persecution and stress more effectively.
Yet, third-sector organisations face a range of barriers when collecting and disbursing cash-based charity donations. Bureaucratic processes from governments, payment delays from traditional financial services institutions, and payment declines from manual transactions can all prevent support from reaching the people who need it most. Instead, instant payments allow people to give money to charity quickly. In turn, third-sector organisations can send support to vulnerable people more efficiently.
With settlement available in seconds, modern instant payment solutions mean third sector orgs can gather charity donations with ease. Best of all, donors can use their smartphone and transfer funds to your organisation at their convenience.
However, there are a few things to consider when modernising the way people give money to charity. Most concern the solutions provider you partner with, as you’ll need a reliable payment network to gather donors’ funds safely and securely
When comparing different providers, pay attention to their approach to security and design. For example, look out for providers with a recently developed payment platform without legacy problems and a strong customer service and integration team.
Receive charity donations faster with Brite Instant Payments
Are you ready to access new revenues and support vulnerable communities? Start your instant payment journey today with Brite.
Brite is a leading provider of Instant Payments across Europe. Powered by open banking, our technology makes collecting charity donations easier and faster than ever before.
With bank-level security available as standard, we ensure the entire process of collecting donations is simple. Best of all, there’s no signup or credit card details required on the donor’s end. Instead, donors authenticate transfers using their bank’s usual identification method; making the entire process quick and easy.
Learn more about our Instant Payment solutions and how we can help by getting in touch with one of our team.