Skip to Main Content

Everything You Need to Know About Donation Processing

3 min read
May 20, 2021
Allison Smith headshot
Allison Smith
Content Marketing Coordinator, Neon One
a credit card transaction

Meeting and exceeding fundraising goals is the name of the game for most nonprofits. But even if you get someone to your donation page or form, it does not guarantee that they will donate. 

Friction points for donating include too many required address fields, too many input fields, and limited payment options. That’s why getting clear on the necessary components of your donation form and simplifying donation processing is a crucial part of fundraising success.

To fundraise successfully, you need to know (1) how to process a donation and (2) how to create a great donation experience.

Before we get started, your organization will need two tools:

  1. A donation tool (a donation button/form for your website)
  2. A payment processor

Additionally, your organization should consider using a CRM for donor data management. A CRM will keep records of your donors that you can use to gain insights on your donor base, create reports, send out communications, and more.

How Does Donation Processing Work?

a step by step flowchart breakdown of how a donation is processed
a step by step flowchart breakdown of how a donation is processed

Your donor finds your donation form and fills out the information needed to give you their intended gift. Once submitted, the payment processor will put your donation in a payment gateway, designed to keep your information confidential while it processes your donation.

Your payment processor then alerts their credit card’s card association of the transaction, and then the card association tells the donor’s bank.

The bank will approve or deny the transaction. Once approved, the card association moves the money from the donor’s bank account to the organization’s bank account. To keep track of all your organization’s donors, you would need a nonprofit CRM to manage your donor data.

Unfortunately, every payment processor will charge your organization payment processing fees. For credit card donations, this will be a card processing fee plus a percentage of the transaction

You can also look for a donation form that will allow your donors to elect to cover the processing cost, which will help reduce your nonprofit’s operational costs. 

Creating an Optimized Donation Experience

To create a seamless donation experience for both your nonprofit and your donors, something you really need to think about is your donation forms. 

The key to this is making your donation forms as short and straightforward as possible. 

A donation form screen shot
A donation form screen shot

What information do you actually need from a donor to be able to accept their donation? Name, address, email, and payment method. Consider adding time-saving buttons on your form, such as “billing address same as shipping” and integrations with popular payment apps such as Paypal, Apple Pay, or even Venmo, where their information is already stored.

It’s crucial you use technology to automate receipts and thank you emails after your nonprofit receives a donation. This will save your organization time and energy, and overall will make things much easier for you. Your donors expect automatic confirmations — if not, they are uncertain if the transaction went through. 

Your prompt thank you message will show your donors that you value their contribution to your organization.

A successful donation experience is crucial to ensure that your first-time donors are interested in giving again in the future — perhaps they will even want to become a monthly donor

Further Reading: 4 Essential Lessons in Donation Page Optimization

Neon Pay + Neon CRM

Is it complicated and expensive? It can be. Or you can get one software solution that does all three. Donation tools, a payment processor, and a CRM all-in-one. That’s where Neon CRM and Neon Pay come in.

with neon crm, you can collect, process, and analyze donations all in one system. Get started!
with neon crm, you can collect, process, and analyze donations all in one system. Get started!

Join the discussion in our Slack channel on connected fundraising

Looking to become a more connected nonprofit leader?

Join 73,000+ of your peers getting industry news, tips, and resources straight to their inbox.