Consolidating Payment Processing A Nonprofit Perspective

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Today you will …

• Learn how American Heart Association developed a centralized approach to payment processing

• Explore the operational benefits of a centralized approach

• Discuss the data integrity and consistency that consolidation achieved

• Leave this session with real-world ideas on how to approach a centralized processing system and insights into preparing for payment processing consolidation

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Erin Westergaard

Client Director, CDS Global

@eewestergaard

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What industry do you represent?

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Chip Sugrue

National Vice President – Customer Strategies/Affiliate Management Consultant; American Heart Association

@chipsugrue

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2020 GoalBy 2020, to improve the cardiovascular health of all Americans by 20 percent while reducing death from cardiovascular diseases and stroke by 20 percent.

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The AHA MissionBuilding healthier lives, free of cardiovascular diseases and stroke.

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SD

NE

AHA Affiliates

SouthWest AffiliateMidge LaPorte Epstein, EVP

AR, CO, NM, OK, *TX & WY

Midwest AffiliateKevin Harker, EVP

IA, IL, IN,*KS, MI, MN,MO, ND, NE, SD & WI

Mid-Atlantic AffiliateJeremy Beauchamp, EVPMD, NC, SC, *VA & WA, DC

Greater Southeast AffiliateDavid Markiewicz, EVP

AL, *FL, GA, LA, MS, PR & TN

WY

AK

WA

MT

OR

ID

CO

AZ

CANV UT

NM

TX

ND

IA

MO

AR

IL

MN

WI

IN

TN

LA

MS AL GA

SC

FL

NC

VA

Great Rivers AffiliateNicole Aiello Sapio, EVP

DE, KY, OH, *PA & WV

MI

KYWV

OHPA

DE

NJ

CTNY

RI

VT NH

ME

MD

DC

PR

HI

KS

OK

National Center

Founders AffiliateMichael Weamer, EVP

CT, ME, MA, NH, NJ, *NY, RI & VT

NYC

MA

SD

Western States AffiliateKathy Rogers, EVP

AK, AZ,*CA, HI, ID, MT, NV, OR, UT & WA

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CDS Global By the Numbers

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The AHA Problem

• 130 offices with differences in processes: Donations captured

Donations acknowledged

Donations receipted

Donations cultivated

• We could not be confident that donors were being appropriately thanked, cultivated or at a minimum, meeting IRS receipting regulations

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The AHA Problem

• 2 million+ offline transactions with not enough staff to capture key donation information into our systems

• Lost opportunity for cultivation and renewal because contributions were not captured for acknowledgement

• No way to confidently know the value of our donors

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Fundraising, Finance and Customer

• Key Partnerships/Commitment

• Don’t assume all departments have the same goals

• Finance was all about the deposit

• Revenue was all about being able to track the total $$$

• Customer was all about capturing the details of the donation into the data base and the thank you

• Everyone had to give up something for the greater good of what we were trying to accomplish

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How many of you have faced a similar problem?

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What to do?

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AHA Objectives

• Find a caging, capture and acknowledgement solution that:

Provides consistency across the organization

Is cost-effective for the Association

Allows for scalability to quantity demands

Is “trackable” – provide the Association a means to record if, when and what type of donation was received and acknowledgement generated

Improves the data quality for the Association

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AHA Vision

• Process all financial contributions into accounting system

• Achieve a donor entry turnaround of three working days from receipt at the donor capture processing location

• Mail an acknowledgement for a contribution with appropriate IRS terminology within five working days of receipt of donation

• Identify trends in giving & segment donors

• Design and implement an association-wide cultivation strategy Classifications of donors

Creation of specific cultivation paths targeted to donor segment needs

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Three Moving Parts

1. Caging• How AHA deposits money

2. Capture• How AHA collects customer data

into the AHA CRM systems (Siebel, Kintera, etc.)

3. Acknowledgement• The “Thank You”

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Caging: What Did AHA Gain?

• Ability to electronically upload data into existing applications

• Ability to develop a reporting infrastructure

• Solution consistently applied/standardized cash receipts guidelines

• Ability to track batch status within caging process

• All affiliates now participating in cash pooling program

• Minimal start-up costs

• Minimized ongoing training costs after implementation

• Ability to add additional income sources

• Minimized impact on system infrastructure

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Capture: What Did AHA Gain?

• Maximized the number of donors captured

• Provided better opportunity for 360 degree view of customer

• Solution consistently applied

• Met data security and internal privacy requirements

• Ability to identify the source of the donation and market

• Disaster recovery is included

• Ability to adjust to future changes in technology

• Gave designated staff visibility to the donation process

• Minimized redundancies in processing between caging and capture

• Ability to have consistent data verification

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Acknowledgements: What Did AHA Gain?

• Ability to comply with IRS reporting guidelines

• Standardized process for thanking our donors.

• Increased cost efficiencies by co-mingling mailings

• Better customer service in responding to donor inquiries

• Customization of acknowledgements by event or activity

• Ability to track status of acknowledgement

• Ability to cultivate and re-engage donors

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AHA Cost Savings / Reallocation

• Existing lockbox costs reduced (e.g. HeartWalk) and reallocated

• Reduced the number of lockboxes needed from 21 to 14

• Some mail costs shifted from affiliates to vendor

• Reduction in copying costs and time spent copying checks

• Staff time reallocated/redeployed due to increased efficiencies

• Depository fees savings of approximately $26,000/year with 8 deposits from the vendor per day versus 300 deposits

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American Heart Association Caging, Capture and Acknowledgement

Phase 2 Expansion and Results

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How many of you are using a remote deposit capture solution?

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Expanding the AHA Program

• Reengineering the process by switching to scanners in 100 of the 130 offices

• Added accounts receivable processing

• Customized acknowledgement letters for Youth Market donors, repeat donors and work place giving donors

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What Did AHA Gain with RDC?

• Savings on postal costs $31,000+ per year (FY14 71% scanned)

• Savings on Tyvek envelope costs $11,830 per year Information scanned in the morning/deposited

the same day

Decreased time to deposit by 4-5 days

Information available in systems within hours

Small interest opportunity (76% of total $$)

Income and documentation in one system

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What Did AHA Gain with Accounts Receivable?

• Centralization of process across country

• Consistency in billing process

• Vendor handles caging, capture process

• Reallocation of staff resources

• Documentation/Transaction in one place

• Easily viewed

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What did AHA gain with Acknowledgements?

• Planned giving wills and estates (10,500+ requests)

• Volunteer opportunities (818 requests)

• Provide research information

• Opportunity to join You’re the Cure Advocacy Network

• Soft ask for additional donations FY 11 – $47,000 / 689 donations / $68.21 gift average

FY 12 – $93,443 / 736 donations / $126.96 gift average

FY 13 – $62,804 / 663 donations / $94.72 gift average

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The Impact In Numbers (2009-4/1/2014)

• More than $1 billion in income processed

• 7.5 million transactions

• 3.1 million acknowledgements mailed

• 11,300 requests for information

• More than 4.7 million new donors added to CRM

• More than $380,000 savings in acquisition costs

• More than $250,000 in unsolicited second gifts

• Savings of more than $100,000 in bank fees

• Savings of more than $24,000 by eliminating seven lockboxes

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Actionable Takeaways

• Meet with Finance, Development and Customer teams to ensure all agree on end goal and are on-board

• Establish consistent guidelines and standardized workflows for all processes touching the payment

• Identify early adopters and leverage these resources for the initial implementation phases

• If looking at outsourcing, consider the following: Minimal financial investment

Quick Implementation timeline

Minimal investment in technology

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questionsErin Westergaard @eewestergaard

Chip Sugrue @chipsugrue

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