When to Utilize Technology for Offline Giving

In today’s giving space, online gifts are becoming more prevalent.  Online giving, text-to-give, recurring credit card payments, etc.—these all reduce the labor required to process gifts. But as we all know, there are still donors who prefer offline giving and want to send in their donations via check.  

Sometimes these offline gifts come with a return document (i.e., donation card, pledge, letter, donor-advised funds, or legal document), and sometimes just the check comes by itself.  Many checks are sent directly from the donor’s bank if the donor completes the donation on their bank’s website. 

For nonprofits that receive a significant amount of offline gifts, it can be a challenge to manage this process effectively. For many organizations, using technology for offline giving can be a huge relief for their gift-processing team. 

How to Determine if it’s Right to Use Technology for Offline Giving 

When looking to determine if technology helps with an offline giving workflow, you must consider three things:

1. Number of Offline Checks Received Over Time

How many offline or check gifts does your organization receive annually?  We all know that the 4^th quarter of the year is the most time-consuming due to people wanting to give to help with individual tax implications and when most of the gifts are made.

2. Time to Process Offline Giving

How long does it take to process offline giving? Find the average amount of time it takes to open mail, enter the pertinent data into your CRM, prepare the check(s) for the deposit, scan or take the checks to the bank for deposit, and do whatever is needed to do with the return documents and checks for safe-keeping or disposal.

3. Hourly Wage With Benefits for an Employee to Process

The last thing to consider is how much you pay an employee.  Consider the full cost of paying for an employee (salary, benefits, etc.) to handle offline giving.  Are there other responsibilities this person(s) must do inside your organization, or do they only process gifts coming in? 

These three things are important as you are trying to determine the overall cost of processing offline giving.  

Processing Gifts Without Technology

Let’s take this as an example: 

• An organization receives 25,000 checks per year as offline giving
• On average, it takes an employee 3 minutes to process a gift
• You pay that employee $20.00 with benefits to perform this processing work  
• The employee has multiple responsibilities other than keying in data from donor donations

The Results: 

Processing Offline Gifts Using Technology

In addition to understanding this, you must understand if you added technology – what does it do to help lower the cost of processing off-line gifts?

AQ2’s AQURIT® software allows an organization to open the mail and physically create batches to be scanned in.  The pertinent information from the return document (i.e., amount(s), donor info, appeal, fund, memorial, split gift, segment code, package code, date, check number, MICR line, etc.…) can be determined within the scan and uploaded into your nonprofit CRM automatically.  

In addition, the software has handwriting recognition that will determine the value of the check. It also will create what is called a “Third-Party Image Cash Letter” (ICL). From there, it will be sent to the bank(s) account(s) via Secure File Transfer Protocol (SFTP) for a secure deposit. 

Lastly, the images (both front and rear) that are scanned will be saved to your network, so you have those for historical reference.  They can also be linked to the gift record within the CRM

Here is a sample workflow diagram.

Let’s take this same example utilizing the AQURIT® software.

• An organization receives 25,000 checks per year
• Instead of taking a person 3 minutes to process a gift, the AQURIT® software can process 5 gifts per minute (with ease)
• You still pay that person $20.00 with benefits to perform this work
• The employee has multiple responsibilities other than keying in data from donor donations

The Results:

25,000 gifts x .2 (the multiplying equivalent of 5 gifts per minute) per gift = 5,000 minutes annually spent on processing gifts.

5,000 minutes / 60 minutes per hour is 83.33 hours in a year spent on processing gifts.  83.33 hours x $20.00/hour work wages = $1,667 spent on processing offline gifts.  

Cost savings over a 5-year period = $76,606.00

Internal Technology for Offline Giving vs. Outsourced Caging or Lockbox

Another option for organizations to assist with processing offline giving is to outsource the work to a 3^rd party organization.  Typically, there are two types of companies that can handle this:  1) financial institutions and 2) caging services.  There are many different models of what these organizations can and will provide for a wide range of pricing options.  Let’s take a look at some of these here.

1. A simple lockbox format will have the mail delivered to a post office box or physical location where they will open the mail, remove the checks and make the deposit.  This works great for a billing situation. (I.e., utility billing organization or some type of payment). 
   
2. A more involved type of lockbox might open the mail, perform the deposit, and possibly enter data into an organization’s accounting software.
   
3. The most labor-intensive type of lockboxes or caging is when the 3^rd party opens the mail, makes the deposit, scans the supporting documents, and sends images and/or files to the client for them to enter the data into their accounting or CRM system.  This, typically, is very expensive, and you may or may not still perform some of the work.

When it comes to nonprofit organizations and nonprofit CRMs that are involved, it becomes increasingly important that the data from the donor is entered correctly.  Regarding Fund accounting, you cannot make the mistake of allocating funds from a donor to another fund, or you can be held accountable by law. You also risk making your donor very unhappy.  With this being so important, you must make sure the 3^rd party organization can enter that data correctly.  You also need to be able to correct it “quickly” if it is not correct or utilizes your internal employees who have access to your CRM for daily review and necessary changes.

Utilizing technology to allow your internal employees or volunteers to assist with this allows you to maintain control of the donor data information as well as the deposits into the financial institution when it comes to offline giving.

In Summary

It is important for an organization to look at the items above when deciding how they should manage offline giving.  Many times, it does not make sense to add technology, and never will.  On the other hand, when it does, there is software that can assist.