I have an annual budget I like to donate and I want it to all be on my AMEX card. It makes my tax return much easier. So I asked Everyday Hero if I could make my birthday donation by AMEX. Their initial reaction was ‘no', and they explained most of their charities didn't accept AMEX, it was more expensive than alternatives, and all AMEX card holders had other cards.
I then asked Marie Stopes if they would accept the donation direct on my AMEX. Same answer - which got me thinking. Refusing a relatively popular method of payment is not really putting the donor first.
Both parties saw the light after some quick dialogue. (To be fair, Everyday Hero was already in the process of sorting it out - but maybe I can take some credit for speeding it along!)
From the donor's point of view
I persuaded Everyday Hero and Marie Stopes by approaching the issue from a donor's point of view. Let's take a sample donor, ‘Sean'. Sean is forty years and one month old, a NIKE (no interest in kids, ever) earns about $100,000 per annum, is on the board of a charity and was recently appointed patron of another.
He aims to give 10% of his income away. He likes to keep all his donations on one card to make filing a tax return easier. As he flies a lot, that one card is AMEX (so he can bag free flights). With so many great charities to choose from, whether or not a charity accepts AMEX is often a crude technique which ‘narrows the field'.
Three reasons why charities don't want to accept AMEX
1. AMEX usually charges more than its rivals for the merchant fee, which can reduce the value of the donation by up to 3%.
2. AMEX card holders have back up cards they can use, such as Visa and MasterCard.
3. Someone at your organisation has to get around to facilitating AMEX transactions, and there are other priorities. Charities are often understaffed, and this seems a lot of effort for small return.
Ten (seven more than three) reasons why charities should accept AMEX
1. AMEX donors give up to 50% more than non AMEX donors*. This negates the first reason why charities may not want to accept AMEX.
2. AMEX donors who give the same as non AMEX donors are identifying themselves as higher value prospects*. Accepting Visa instead of AMEX removes the ‘rich prospect' flag from your database.
3. Many AMEX charge cards have no credit limits, which reduces bounces.
4. AMEX regular givers give slightly higher monthly donations on regular gift programs but have a significantly higher retention rate*.
5. Richer people - i.e. best donor prospects - tend to have AMEX cards.
6. AMEX holders pay for their cards, so they want to use them. They self-justify with great insurance, a free return flight, frequent flyer points, free lounge access etc, but some of them are just poor people made good who can't accept they actually qualify for one.
7. Explaining why you accept AMEX is a useful example for customer focused training putting donors ahead of admin.
8. AMEX donors like to keep donations on one card as it is easier for tax returns.
9. AMEX donors may say that it is fine when you ask for Visa instead, but you are creating a barrier. They wouldn't have offered AMEX first if they wanted the donation on a different card.
10. You need to think about donors first!
*AMEX's own research backs this up here, but below is a table from Pareto's research, looking at appeal type gifts for one charity with a large enough sample set:
Diners should be accepted too, for the same reasons.
The point here is not that you should necessarily accept AMEX (and I assure you, they are not paying me to write this article!). The point is that a tiny decision, such as whether or not to accept AMEX, says a lot about how an organisation values a donor-centric model.
Staff from Marie Stopes told me they will be able to accept AMEX soon, which is great - it gives me time to save the unexpected higher sum of $5,000 I have to match.
Put donors first.
[Every month I write a column 'The Agitator' for Fundraising and Philanthropy magazine and this post is my most recent entry!]