Even today, the most effective way for political campaigns to raise money is still the ‘old-fashioned’ way – by making calls and holding events. Personal contacts and solicitation are still an integral part of the fundraising process and necessary for raising money.
Online fundraising can be a good way to bring in campaign funds, particularly if you want to target a wider audience and a greater quantity of small donations. As technical barriers have dropped in recent years, more and more local campaigns are raising money online.
Keep in mind that under no circumstances will the internet magically bring in money. Your campaign website exists as a conduit through which to raise money, not as a means unto itself. If your website is not promoted or no one has an interest in your website (or your campaign for that matter), slapping an online donation button onto a web page will not do a thing for you.
Accepting online donations carries associated costs. Services that allow you to accept online credit card contributions charge transaction fees (typically between 3 – 8%) that are deducted off the top of any payment. Some services also charge setup and recurring fees.
Regardless of how you raise money, your campaign is responsible for complying with the law. For example, you may need to collect certain information about your donors or have a legal limit on contributions.
Check your local laws and, if necessary, seek legal advice.
Below is a summary of a payment process for online donations:
After clicking a ‘Donate Now’ button on a website or link in a campaign email, visitors enter their billing and other requested information on a donation or contribution form. Then they submit their information to start the payment process.
After submission, a payment gateway takes over. A payment gateway is a service process that verifies and electronically moves funds. The donor’s credit card is electronically verified and charged. Then the funds are deposited into a Merchant Account. This account may be in your organization’s name or in the name of the payment gateway vendor.
When the transaction is complete, the donor is shown a confirmation page and sent an e-mail confirmation. At this point, a record of the transaction becomes available for your reporting purposes – and the donation process is complete!
Online payments can be accepted either through a third-party processor or through an online merchant account. If you decide to pursue online donations, you should establish your payment system early. Depending on the requirements, you may need a campaign bank account in place and/or verification of your organization’s non-profit status.