Chas Offutt, senior consultant at Blackbaud, and Andrew Shoaff, Blackbaud’s interactive strategy practice manager, are contributors for Nonprofit Hub. Chas is a digital marketing professional with more than 10 years experience in the nonprofit sector, and Andrew helps deliver innovative solutions for constituent engagement and multichannel marketing across all nonprofit verticals.
As integrated marketers, we spend a huge amount of time making sure our constituents are provided a range of donation options so they can decide for themselves how to best support our cause. Multi-channel giving 101, right?
In the digital space credit cards are a no brainer, and bank withdrawals have been around for long time, but what about non-credit card based transactions such as Amazon Checkout or PayPal?
In the Luminate Online platform these transactions are known as “XCheckout”. The XCheckout functionality allows donors to connect directly to their third-party payment account (again, PayPal or Amazon) to make their donation.
XCheckout drives a lot of discussion both within Blackbaud and with our many clients. However, very little organizational data exists to determine its value.
To address this void, we reviewed five organizations to better understand the impact of the XCheckout third-party payment method on the Luminate Online platform.
Who Was Selected
Five large national (and international) organizations across multiple nonprofit verticals were selected for this high-level review. The five organizations each raised $1 million or more in 2012 from one-time online donations. Donations that exceeded $500 were removed from the sample set based on what we know of a younger, third-party payment audience. All five of the organizations were also considered “early adopters” of the third-party payment methods.
What We Did
First, the 2012 transactional data was pulled for each organization. Then, all gifts under $500 were removed from the sample set. Lastly, the donations, revenue, and average gift amount were analyzed for the XCheckout payment method. This was then compared to the balance of remaining payment methods, i.e. Visa, MasterCard, American Express, and/or Bank Withdrawal.
What We Learned
The XCheckout payment method represented 8.8 percent of the total one-time online donations and 7.7 percent of the total one-time fundraising revenue across the five organizations in 2012. The average gift for XCheckout was $47 compared to $69 for the remaining payment method options.
The results of the above study suggest donor adoption of XCheckout payment options is significant enough to warrant serious consideration by nonprofits. It’s our opinion that nonprofits will increasingly look to non-credit card based transactions as a viable option to include in their online payment portfolio.
Identifying a baseline for XCheckout is a start, but we’ve only scratched the surface. A lot of questions remain about these transactions. It’s unclear at this time if XCheckout will increase donor value, is a viable acquisition source, and/or if it will improve conversions rates. Are these new or repeat donors? Does XCheckout make it easier to give using a Smartphone? What behavioral trends can we glean to drive segmentation?
What we know for sure is that payment option diversity is critical. Constituents want donation options that suit an ever expanding number of interests, needs and circumstances. If you haven’t done so already, consider if the XCheckout option makes sense for your organization.