Why Organisations Need a Charity Direct Debit System
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There’s no denying that the COVID-19 pandemic hit Australians hard. And unfortunately, Australian charities weren’t spared either. In 2020, nearly 2000 charities ceased operations during the pandemic with at least 650 of those charities citing COVID-19 as the direct cause. Thankfully, in 2022, charities began to bounce back seeing a 12% increase in charitable donations. Now, in 2023, with the steep rise in living costs, Australian charities are again facing hard times. So, how can offering charity direct debits help encourage donations in these lean times? And how can a charity direct debit system, like Biz Core, help reduce operational costs? Let’s find out!
What is direct debit?
Direct debit is a scheduled automatic transaction that debits funds from a customer’s bank account to a merchant account. The payment schedule must be agreed upon by both the customer and the business, and does not begin until a signed direct debit request form is completed.
While, direct debit can be used for one off payments, it is predominantly used for recurring payments. These recurring payments are often weekly, fortnightly, or monthly.
Why charities need direct debit
The rise in the cost of living is causing many Aussie families to seek assistance from charities and not-for-profit organisations. While charities are struggling to meet community demand, they are also feeling the pressure from the rising cost of doing business.
Now more than ever it’s vital for charities to increase their donations and reduce their operational costs. Offering charity direct debits is a great way to accomplish both goals.
What are the benefits of direct debit for charities?
There are three main benefits of direct debit for charities.
Consistent donations = Consistent income
Predicting income can be difficult for charities. Donations are often sporadic and of varying amounts. However, with direct debit, you can have consistent amounts coming into your organisation at consistent times. This will give you the ability to forecast so you can plan how to grow.
Reduced operational costs and save time
Direct debit helps to reduce operational costs by reducing both administrative work and accounting work. Old fashioned methods like cash and cheques often require manual handling and processing. This can waste the valuable time of staff and drive up administrative costs. Using direct debit automates the donation process so that your organisation can not only save money, but also use your time more efficiently.
Increase donor retention
Out of date credit or debit cards are one of the biggest killers for memberships. By encouraging your donors to switch to direct debit, you can avoid losing memberships to out of date debit or credit cards.
Direct debit also makes the process of donating easy and hassle free. The easier it is for people to donate and manage their donations, the more likely they are to continue to contribute.
How do I set up direct debit for my organisation?
While every direct debit provider will have their own unique sign up process, the two most significant steps to setting up direct debit for organisation are:
- choosing the right payment provider for your organisation
- inviting your donors to sign up for direct debit
Choosing the right direct debit provider for your organisation is often the hardest part. Essentially, the right direct debit provider should make the entire process easier and simpler for both you and your donors.
At Biz Core, we know how hardworking our heroes in charitable organisations are and how limited their time is. That’s why Biz Core’s direct debit system offers a fast and simple setup process. Direct debit set up takes just 3 easy steps:
- Set – Enter the payer details into Biz Core and set the payment schedule. The platform has purpose-built tools to make this quick and painless.
- Sign – Once set, our smart software will automatically email a direct debit authority form to the payer which can be signed online.
- Forget – Biz Core knows when the form is signed and will store it for you. Direct debits will now be automatic from the first scheduled payment date.
How much does it cost to set up a direct debit?
Each payment provider will have their own fees and costs associated with their service. It’s important to keep an eye out for any hidden setup costs and admin fees when choosing a payment provider.
At Biz Core, we understand that every dollar counts when it comes to helping those in need. That’s why we offer no set-up or running costs and minimal transaction fees. Biz Core is committed to saving you money so you can spend it where it counts!
What is the best direct debit provider?
Ultimately, the best direct debit provider should work as hard as you do! The right system, like Biz Core, should
- reduce operational costs by automating administrative and accounting processes,
- simplify and organise customer management so your staff can concentrate on more important tasks,
- provide flexible payment solutions so that your organisation can attract and retain as many donors as possible,
- in-built security and data protection to keep your donors information safe,
- and provide comprehensive reporting capabilities so that you can track how your organisation is tracking and accurately forecast for the future.
Biz Core’s complete payment processing platform offers all of the above and more. We take the stress out of payment processing and customer management so you can focus on growing your organisation.
Do more with Biz Core
Life can be tough and there will always be someone out there who needs a hand. Biz Core is committed to providing a direct debit system that can take stress out of payment processing so you can focus on what’s important. Contact our friendly team today for more information or a free live demo.
Charity Direct Debit FAQs
What is the difference between a direct debit and a recurring card payment?
A direct debit occurs when funds are taken directly from a bank account. On the other hand, recurring card payments are charged directly to the credit or debit card.
Biz Core’s advanced and secure payment software makes processing both direct debits and card payments a breeze. Contact us today for a free live demo!
How long does direct debit last?
Typically, a direct debit will continue until either the customer or the company contacts their respective banks or payment providers to cancel the direct debit.
Which charities are tax deductible in Australia?
Charitable donations and gifts are tax deductible as long as the charity is registered as a DGR (deductible gift recipient). You can check if an organisation is registered as a DGR using the ABN Look-up: Deductible gift recipients.
Can you get a refund from a charity?
It is possible to receive a refund from a charity, but this will depend on each organisation's refund policy.
With Biz Core’s comprehensive payment platform, your organisation can easily process both incoming payments and refunds. Contact us for more information.