Raise More, Worry Less: How to Safeguard Your Nonprofit’s Funds

As a nonprofit, you work tirelessly to raise funds, and it’s important to ensure that every dollar raised goes towards your mission. 

The shift towards online fundraising has opened up a world of opportunities for nonprofits, allowing you to reach potential donors from anywhere and at any time. This transition has also brought new risks that nonprofits should be aware of. Donation processing poses a significant risk to your nonprofit organization, both in terms of reputation and finances.

We’ll discuss the potential risks associated with donation processing and provide proactive measures you can take to safeguard your nonprofit’s funds.

Understanding Payment Processor Risks

No one wants to think about the “What if”. We get it. But this doesn’t have to be a place of anxiety. Understanding the potential risks will help you know what to look for when considering how you can safely process your donations. 

Here are four key risks that your nonprofit should safeguard against:

• Fraud: Nonprofits can be vulnerable to fraudulent transactions, where an individual uses a stolen credit card or other fraudulent means to make a donation. Some payment processors take proactive measures to prevent fraudulent charges. This can be helpful for nonprofits who don’t have the time or funds to be monitoring for fraud. 
• Data breaches: Payment processors store sensitive donor information, such as credit card numbers, which can be a target for hackers. In the event of a data breach, nonprofits can be held liable for any resulting damages or legal actions. It’s important to consider the security of both your payments processor and other fundraising tools, like your donor database. 
• Fees: Payment processors typically charge fees for their services. However, when these fees are inconsistent or include chargebacks — this can eat into your nonprofits funds very quickly. 
• Downtime: When choosing a payment processor you should consider potential downtime incidents. If you are in the middle of your Giving Tuesday online fundraising marathon, you don’t want to worry about your payments processor not working. Talk to your payments processor and ask about how they prepare for high volume fundraising times. 

We understand that nonprofits work tirelessly to raise funds for their cause, and it’s important to protect those funds from all potential risks. 

In a recent cautionary tale, nonprofit organization Queens Together encountered a scam known as the “credit card test attack.” Unfortunately, fraudsters took advantage of their payment processing system and racked up over $5,500 in transaction fees.

By sharing this story, we hope to encourage nonprofits to prioritize the security of their payment processing systems, taking steps to choose a system that helps protect from fraudulent activities and ensuring their resources are utilized for their causes.

Is your payments processor actively protecting your nonprofit from fraud, chargeback feeds and downtime? If not, there is a solution that will — learn more about Bloomerang Payments. 

Ensuring Your Nonprofit Funds are Protected

We all know that offering a payment method that allows for online and in-person payments via different methods is essential for nonprofit organizations. 

It’s crucial to review payment processors carefully to ensure that they meet your organization’s needs and protect against potential risks. Below are a few questions you can ask your payments solution to ensure your nonprofit funds are protected. 

Questions to Ask Your Payments Processor

• How do you proactively protect against fraud? What are our responsibilities to protect against fraud versus yours? Is this included in our payment processing rate or an additional charge?
• How often can we set up deposits and is this flexible to meet the needs of our business?  How quickly are deposits added to our bank account?
• Do you cover chargeback fees or does our nonprofit absorb the cost?
• What is the total cost of using your payment processing solution, including all fees and charges?
• Do you prepare for key fundraising times in the year like Giving Tuesday to ensure no downtime?
• What types of payment options do you offer? (i.e. ACH, credit card, and in-person payment options)
• Are you PCI Compliant, ensuring donor data is securely stored and processed?
• Do you handle disputes or issues with transactions?
• How do you reconcile and track charges and can we do this within our existing CRM solution?
• Was your solution designed with nonprofits in mind? Will updates and future product releases include features that make fundraising easier?

You know the importance of safeguarding your funds and that starts by understanding and mitigating payment processor risks. 

We are here to help your nonprofit thrive, and if you are considering a payments solution that is committed to protecting your nonprofit from fraud, chargeback fees, and a consistent donation experience — learn more about Bloomerang Payments today!