The Chronicle of Philanthropy

Mobile-Payment Devices
Spur Spontaneous Gifts

By Raymund Flandez

At a cocktail party to raise money for the Brooklyn Community Pride Center, volunteers mingled with guests, selling them raffle tickets by swiping credit cards through a small device attached to their iPads and iPhones.

A few years ago, the New York City charity wouldn’t have been able to do such a thing. Donors would have paid for their tickets in cash—or not given at all.

Today, the gay and lesbian community center charges the $10 raffle tickets (or $25 for three tickets) on donors’ credit and debit cards on the spot, using a device called Square, which processes transactions through smartphones and tablets. The number of gifts made to the center through the device jumped 50 percent this year.

“Strike while the iron is hot,”
says Todd W. Fliedner, develop-
ment director at the center. “If
somebody is in a generous mood,
you don’t want to lose that mo-
mentum.”
Nonprofit organizations are
discovering that devices like
Square are helping them col-
lect donations from supporters
quickly. At a time when more
people are carrying less cash
in their wallets, the option to
donate on the fly with a credit
card offers charity supporters
a convenient way to contribute
and gives nonprofits a chance to
scoop up gifts that they might
not have gotten otherwise.

Other nonprofits, including the Salvation Army and the Girl Scouts of the USA, are using other mobile-payment products and services. Besides Square, some of the new services include PayPal’s Here, Intuit’s GoPayment, Eventbrite’s At The Door, and Sage Mobile Payments. (See below.)

Many nonprofit clients of
Mark & Phil, a marketing and
philanthropic-strategy agen-
cy in Poughkeepsie, N.Y., are
adopting the credit-card devices
for fundraising galas and other
events. “This is the beginning of
true mobile donations, without
a doubt,” says Daniel Schutz-
smith, head of Mark & Phil.

Streamlined Giving

Charities say that mobile-payment tools like Square allow them to raise more money, make their fundraising go much more smoothly, and ease giving for donors on the go. They’re using those tools at outdoor fund-raising events, like golf tournaments, and inside, like at exhibition halls, where foot traffic makes it easy to recruit members or sell nonprofit goods such as T-shirts or Girl Scout cookies.

Converting a personal smartphone into a payment device is easy. To start getting gifts over the phone, nonprofits just need to download a free application onto their smartphones or tablets and sign up to get a card reader in the mail. The reader fits over the audio jack or the plug on the mobile devices. When payments are processed, most of the data collected, such as names and e-mail addresses, can be uploaded to the charities’ donor databases.

Depending on the device selected, vendors charge about 1. 7 percent to 3 percent per transaction, although some companies also require monthly payments or higher fees for using certain credit cards or may charge for extra card readers.

In its second year using Square, the Brooklyn Community Pride Center persuaded 100 people to pay $100 per ticket at the door using the device. The group took the approach after an intern suggested the idea.

“More than anything, the approach has made us able to ac-

COURTES Y OF GIRL SCOU TS OF EAS TERN PENNSYLVANIA

Several Girl Scouts chapters nationwide have begun using Sage Mobile Payments devices to help process cookie-sale revenue. The practice has led to a boost in sales.

commodate our guests better,”
says Mr. Fliedner. “It’s truly a
way to collect money mobilely.
You can be in motion.”
Fundraisers who use the
devices say transactions are
much more secure, since they
don’t have to fumble to jot down
credit-card digits or count and
deposit cash.

Instead, a donation goes directly to the nonprofit’s designated bank account after a charity worker or volunteer swipes a credit card. In addition, the device’s encryption technology automatically scrambles the credit-card data.

To be sure, questions about whether the transactions are truly secure over wireless networks are being examined by Congress. Government scrutiny will probably intensify as this type of payment becomes more popular.

Novelty Helps

The novelty of the devices has also given charities a distinct advantage over other nonprofits that don’t offer a quick way to accept credit-card payments.

For the past few months,
Catskill Animal Sanctuary
has been using Square at con-
ferences or events, such as
pet expositions, where it sells
merchandise. Other vendors
haven’t caught on to the trend
yet.

Mobile-Payment Devices for Charities: a Sampling Product

Company

Eventbrite

Special features

Plugs directly into the iPad’s 30-pin connector, instead of the audio jack, to speed up credit-card processing.

GoPayment
Intuit
Here
PayPal

Cost Compatibility

3 percent of the credit-card transaction. Card reader Works only with iPads. costs $10 plus shipping, but until the end of the year, charities can get a $10 rebate.

Two alternatives are available. For the pay-as-you-go option, the company charges 2. 7 percent per credit-card swipe but 3. 7 percent if the credit-card number is typed into the device. The monthly option is $12.95 per month plus 1. 7 percent of the transaction fee, or 2. 7 percent if the number is keyed in. Card reader is free.

2. 7 percent per transaction. Card reader is free.

Works with Androids, iPads, and iPhones.

Can deposit donors’ money into the charity’s bank account or onto a Visa card that the company provides. Works with Intuit’s QuickBooks so charities can record donations later.

Sage Mobile Payments Sage Software
Varies by organization. Demands a higher fee
to process American Express cards and to type
in credit-card information rather than swiping
the card. Card reader is free.