Recurring donations are the lifeblood of nonprofits, providing predictable and sustainable funding to drive your impactful work. To make this process even more seamless and donor-friendly, nonprofits often offer various payment options, such as credit cards. But one method stands out for its efficiency and reliability: ACH payments (or open banking for our United Kingdom readers).

So, what exactly is ACH? Simply put, an ACH payment, also known as Automated Clearing House, is an electronic transfer made directly from a bank account, requiring an account and routing number.

ACH is an ideal choice for recurring donations. From reduced fees to improved donor retention, we’ll break down the advantages of ACH payments and share practical tips to incorporate them into your organization’s strategy.

Benefits of ACH Payments (or Open Banking)

There are benefits to ACH or open banking for your nonprofit organization and donors. (It’s a win-win option!)

For your organization, the primary reasons to consider ACH include cheaper fees to process transactions, meaning you get more of every donation. This can also be a more reliable option because you won’t have to worry about tracking down donors if their credit cards expire or are changed for any other reason.

Donors like the ACH option because of the reliability of the transaction and knowing that more of their money is being used to support your cause.

Together, this often results in higher donation levels from those who give via ACH payments.

Donors Give More

Multiple studies have found that donors who give directly from their banks donate more over time. On average, organizations see about 3% of all donations coming via bank draft or ACH, providing a growth opportunity for most nonprofits.

• 29% more giving on average from bank account donors (via Classy)
• 2 times more giving from bank account donors (via FundraiseUp)
• 84% greater lifetime value of donors who give via bank account (via Charity:Water)

Need more proof? An experiment by Luther Seminary showed that overall donor conversion rates were 9% higher when ACH was offered as a payment option. (What could you do with a 9% increase in donations?)

Your Donations Won’t Be at Risk

ACH payments are more reliable for your organization because they come directly from a bank.

You won’t have to worry about credit cards expiring and having to chase down those accounts or potentially lose the donor. The same is true when it comes to people changing cards for any other reason, as people often forget to update recurring accounts.

It’s Cheaper

While ACH transactions may have some associated fees, they are almost always significantly less than credit card processing fees. (Check with your financial institution for exact costs.)

Credit card fees, for example, are between 1.5% and 3% per transaction. ACH fees can be a few cents on the dollar (flat fee), a smaller percentage (between 0.5% and 1.5%), or have set monthly or batch fees.

How to Encourage ACH Payments

Helping donors switch to ACH payments is easier than you might think. With a few simple setups and potential changes to default payment options, you can seamlessly encourage ACH as the go-to option for recurring payments online.

Here are four ways to implement those changes.

Change ACH to the Default Option

One of the easiest things you can do to encourage ACH donations is to change the default payment method on your donation forms to the ACH option. (Yes, you can and should include other payment options as well.)

Remember that 9% higher conversion rate in the Luther Seminary study? That’s a strong indicator of why you should try this option.

The Recurring Donations add-on for GiveWP works alongside the Stripe Plaid/ACH payments with no additional configuration. To accept recurring donations with Stripe Plaid/ACH, activate and configure both the Stripe add-on and the Recurring Donations add-on.

Highlight One Option

Instead of changing the default option, you can highlight the ACH option to bring more attention or focus to it.

Some nonprofits will option to make ACH the only option here, but that can be somewhat risky because some donors, especially one-time donors, may not want to give in this way.

This is why a highlighted, or highlighted and default, option can make it more visible. Visually, this means making the ACH option have a bigger or bolder font or button. The goal is to make this payment option visually prominent while downplaying other payment options.

Explain the Benefits to Donors

Donors who understand how an ACH option can be beneficial are more likely to use it. Be transparent about why your organization prefers the ACH option, focusing on a direct benefit that the donor will understand, such as a greater percentage of the donation gets to your organization or that ACH is an easier option.

Consider adding this information right on your donation page with a call for donors to set up recurring ACH payments.

Consider phrasing such as: “This will help us ensure consistent donations throughout the year while being less maintenance for you!”

Ask Donors to Consider ACH Payments

There’s no better method for generating more ACH donations than making a direct ask.

Donors appreciate direct communications. Create a strategic plan for making this type of ask with a series of emails explaining the benefit of ACH and providing easy steps for switching their recurring donation option or beginning a new recurring donation.

Consider this plan:

• Ask for a recurring, ACH donations on your form (Consider making it the default as noted above.)
• Use onboarding emails to make the ACH ask. Include the ask in any one-time donation thank you’s (Would you consider a recurring ACH donation?)
• After three months, make that ask again with a supporter engagement email
• Include an ACH information block in regular email newsletters – maybe once a quarter or annually, depending on your newsletter frequency – with a note on the benefits of ACH donations and how you can switch to this option

Start Increasing Your Recurring Donations

Direct banking donation options can be beneficial to your organization and donors. They provide ease of use, safe and consistent payments, and can help your nonprofit increase recurring donations.

You can implement recurring donations with ACH right into your donation forms using the GiveWP Visual Donation Form Builder in WordPress. Just like with any of your other donation forms, you can customize it every step along the way to fit your nonprofit and specific campaigns.

Learn more about this tool and download GiveWP today if you are ready to get started.