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Online Membership and Payment: 6 Benefits for Your Nonprofit

The summer holidays are quickly approaching, but you still have plenty to prepare for the upcoming membership renewals and new membership campaigns. What if this year, you managed your organization’s memberships online?

First, let's talk about why your organization should have memberships for your community.

Once you create a membership, your members could mail checks to your organization...or they can pay online!

Here are 6 benefits of online payments:

1. Online Payment: the New Normal
2. More Secure and Trackable Payments
3. Real-Time Cash Flow
4. Simple Process
5. No More Data Entry Errors
6. Save Time for Your Members

Finally, we will explain how to respond to common concerns about online payment.

Let’s talk about how online memberships and payments can benefit your nonprofit!

membership-for-nonprofitsMemberships for Your Nonprofit
Membership vs. Subscription

First, let’s define these terms, because these two terms are often used interchangeably. They are rather different from each other, actually: 

  • A membership is when a member joins a community, and can access member-only resources and events. Memberships may have a membership fee, but are not required.
  • A subscription is when a subscriber pays a regular fee monthly or annually for access to a product or service. 

Membership models usually encourage members to also contribute time and knowledge to the community, whereas subscribers pay for an expected product or service.

If your nonprofit produces an online journal, classes, or webinars, you can explore offering subscriptions to your content. However, since subscriptions are more transactional, subscription models would lose out on the power and energy your community can contribute to the organization.

Let’s talk more about memberships now, because nonprofits can really benefit from building a two-way relationship with their communities!

Why Offer Memberships for Your Nonprofit?

Memberships are a primary source of funding for some nonprofits. Depending on your organization’s mission, you can build a membership model that cultivates your community and increases member interaction with each other, while also generating funding for your nonprofit’s operations.

Why would anyone pay to be a member? Good question! There are plenty of reasons, including:

  • Access to member-only events and resources
  • Special member-only updates and news, different from the general email newsletter
  • Smaller monthly payments instead of a large payment at once
  • To support a cause or mission

Not only is it a source of revenue, your membership database will also be updated with real-time information about members, since you’ll be in regular communication with them.

Membership Fees

There are a couple possible ways to structure your organization’s membership fee:

  1. A flat fee (the same membership fee for everyone)
  2. Membership levels with increasing benefits for higher fees

    For example:
    $10 per month for Students - Free entry to member events
    $25 per month for Regular Membership - Free entry to member events + receptions
    $50 per month for Premium Membership - Free entry to member events + receptions + lunchtime seminars

  3. You can offer membership discounts for friends and family, to organically increase the number of memberships through referrals and word of mouth.

You’d need to decide whether it is better for your organization to have monthly or annual fees. Monthly memberships allow more flexibility for members to join and leave, while annual memberships are more helpful for the organization, to avoid too much funding unpredictability.

Tax Deduction for Membership Fees 

As a nonprofit, your organization can offer tax deductions on donations and any contributions.

Membership fees may be tax deductible if: 

  • The membership fee is paid to an organization registered as a 501(c)3 nonprofit.
  • The member does not receive any goods or services in return. If there are goods or services received in exchange for the membership fee, the amount equal to the fair market value of the good or service is not tax deductible.

If membership fees are tax deductible, your nonprofit would need to issue a tax receipt for the member’s tax records. Please consult best practices on tax deduction documents.

As you can see, setting up memberships can really benefit your organization. Let’s continue exploring some best membership practices!

tax-deduction-nonprofit

Benefits of Online Membership Registration

Technology has revolutionized the way we live. We can purchase anything, compare prices, and pay in a few clicks. Your organization should also make membership registration easy and fast for your community...by doing it all online!

Here are the advantages of offering online registration for your members: 

#1) Online Payment: the New Normal

About 90% of 18- to 29-year-olds and 59% of 65-year olds and older make online purchases, according to a 2015 study. These percentages are increasing each year, as e-commerce is becoming more and more common for daily purchases and paying bills. 

Online banking has made it easy to send and receive funds without ever taking out a checkbook. 

nonprofit-membership-payment-onlineWith just 2 clicks, Alvina has successfully 
registered and
paid for her membership

#2) More Secure and Trackable Payments

Online transactions are secure because everything is documented, for both the sender and receiver. It is safer to manage membership payments online than it is to receive cash in person, because you don’t have to safeguard your cash box in your office. 

You can also reassure your members: online payments are protected thanks to fraud protection provided by many credit and debit card providers.

#3) Real-Time Cash Flow

One big advantage is that you can transfer money from your membership registrations to a bank account with just a few clicks. No more waiting and collecting checks for a trip to the bank at the end of the month!

#4) Simple Process

By offering online payment, your potential members would not have to manage paperwork or mailing a check. Simplicity is an important value for AssoConnect.

A simpler process doesn’t mean omitting information though! Your organization should provide all necessary details about the membership and payment process during the online registration, such as terms and conditions, refund policy, and renewal.

AssoConnect’s online software also simplifies nonprofits’ lives by compiling all members’ information in one single database. No need to search in multiple filing cabinets anymore - all the parental authorizations, payment history, and other documents are available in one place!

#5) No More Data Entry Errors

Paper registration forms are essentially blank canvases for your members to fill with different handwriting and formatting styles. After you decipher all the dots and dashes, you have to enter the information into an Excel sheet. Repeat these steps for each member…and you end up spending a lot of time processing registrations!

If you process online registrations through an online software such as AssoConnect, the software automatically processes the payment and contact information once the member registers.

membership-online-payment-frustration
All these handwritten membership forms
are causing David a headache!

#6) Save Time for Your Members 

Online payment is simple with just a credit card, a computer or smartphone, and an internet connection! On average, registration only takes 2 minutes to fill out a membership form and complete the payment.

On the other hand, registration via paper and checks would look like this:

  • Download and print membership form
  • Fill out form
  • Write check for membership fee
  • Prepare envelope, stamp to mail membership form and check
  • Drop off envelope at post office

If a member gets distracted before completing all the steps, you’d never receive their registration in time. You should definitely make it easier for your members with online membership registration!

nonprofit-online-registration

Concerns about Online Membership Payments

Your organization might not unanimously support the idea of online memberships. That’s ok! Here are some common concerns, and how to respond to them: 

"Some people don’t want to register online.”

If your community has long-time members, they may be reluctant to change their habits.

However, there are ways to encourage people to try it out. You can offer a discount for online registration! Instead of springing the change on your members, you can announce the shift to online registration with a positive spin

You should explain how shifting membership registration online will benefit everyone - the members and the organization. Feel free to make the shift less daunting for your members by adding step-by-step screenshots showing how to register and pay online. 

You can accommodate a small group of members who prefer to register offline, by gathering their information and then filling out the online form on their behalf. (Make sure you destroy the information after you have entered it online!)

"Some people will not want to pay online."

It’s true, some people are not 100% comfortable with giving their bank details online. This is understandable and we must respect their wishes.

You need to have an option in the online registration form that allows cash and check payment.

Even if the payment is not made online, asking your members to fill out an online form will save you 90% of the data entry. All that remains for you to do? Just confirm when the membership payment is received.

Luckily, AssoConnect software offers nonprofits an easy platform for online membership registration, and it also tracks the status of check/cash payments from members!

nonprofit-membership-online-feesPierre prefers to pay his membership fees online,
because it's faster and easier

"We don’t want to pay transaction fees."

If your organization wants to keep membership fees as low as possible for your members, transaction fees are indeed a concern.

However, these fees should be weighed against the many benefits of online payment! Your organization would regain time that would otherwise be spent on processing membership paperwork, data entry, handling checks, and waiting for banks to process funds. 

Online payment services are rarely ever free. If you didn’t have to pay for a transaction fee recently for a recent online donation or purchase, it’s because someone behind-the-scenes absorbed and paid the transaction fee for you.

AssoConnect’s transaction fee for each transaction is 4% total amount + $0.40.

Let’s say your membership fee is $100 per member, and 100 members register and pay online. The total cost for your organization for transaction fees would be $440, but you would receive $10,000 total in membership payments and save time doing it. 

$440 is roughly the same as 4 memberships. Over the years, you may risk losing more than 4 memberships if you don't offer an online payment option!

If you use AssoConnect to process online membership registration, you can use your time to:

  • Work on grant applications
  • Organize a welcome event for your new members
  • Brainstorm creative ways to fundraise
  • Recruit more volunteers

AssoConnect can help you regain your time so you’re not tied to your desk processing membership registration and payments!

"Won’t online memberships remove human contact from the process?"

For membership renewals, submitting the online form is just a formality. You already know these members, so you wouldn’t need to worry about not being part of the renewal process.

For new members, it is understandable to want to meet a member before joining. If this step is important to your organization, you can split up the membership process to create a "pre-registration" contact form, to open up communication with the potential member first.

It is more important that you have all your members’ information organized in one database, so that you can efficiently organize a welcome event for new and returning members. Your event would be more effective after all the registration process is completed!

nonprofit-registration-efficient

Your organization probably could use more time on brainstorming and developing exciting new events and projects for your members. This is why AssoConnect steps in to help alleviate your nonprofit’s administrative tasks!

Memberships are a great way to connect with the community that is interested in your organization’s work and mission. If you make it easy to join as a member, and your members love supporting the organization, your nonprofit will continue to flourish with its supportive membership base

nonprofit-membership-baseAssoConnect is trusted by 10,000+ nonprofits. Request a free demo today for AssoConnect, the software that makes life easier for nonprofits!

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