Cyber-Tithing
On-line giving creates ease and convenience for church supporters

By Tim Whitehorn

George Barna, a Christian pollster, heads the Barna Research Group (BRG), a marketing research company that has been tracking the social, religious and political state of the nation since 1984. The most recent BRG study, the Cyberchurch Report, found that people are warming up to the idea of "cyberfaith," with 8 percent of adults and 12 percent of teens currently using the Internet for spiritual experiences. More than two-thirds indicated they were likely to go on-line for religious experiences, such as listening to archived religious teaching, reading on-line devotionals and buying products.

This fits into the overall picture of America's Internet use. Currently, more than 119 million people are on-line in this country, according to eMarketer, a provider of Internet and e-business statistics. eMarketer predicts this number will increase to 153 million by 2003.

Nielsen//NetRatings and Harris Interactive (an Internet audience measurement service and an Internet-based market research firm, respectively) recently reported that nearly half of the total adult population of the United States are purchasing on-line. That's 48.2 percent of all U.S. adults and 81.2 percent of the nation's total on-line population.

The demographics of the on-line U.S. population are broad and will continue to increase by 2003, according to another eMarketer report. Currently on-line are 17.1 million children (ages 5-13), 12.8 million teens (ages 14-17), 76.5 million adults (ages 18-54) and 13.5 million seniors (55 plus).

On-line giving is also on the rise. Internet and philanthropy consultants predict that on-line giving will increase the same way on-line shopping has. Harvard professor James Austin predicted that by 2010, nonprofits will raise 30 percent of their funds on-line. Early numbers indicate that the average sum donated on-line is higher than through traditional means ($90 to $150 compared to $30 to $60).

Churches catching on slowly

So why aren't churches taking advantage of this trend? Others organizations are, and doing it successfully.

One of the most significant success stories to date is that of the Red Cross of America. One of the nation's largest nonprofits, last year it garnered $2.5 million in donations on-line. Another example is The Dallas Morning News Charities, whose average on-line donation nearly doubled from last year. A listener-supported Chicago radio station, WBEZ, replaced an entire on-air pledge drive in January with an on-line pledge drive. The on-air mentions were brief but the station raised $135,000. Even the 2000 elections saw astonishing Internet activity and on-line contributions.

It wasn't long ago that most charities and nonprofit organizations weren't equipped to accept and process on-line donations. Today, nearly all national organizations and local agencies take on-line gifts.

Yet most church Web sites don't include on-line giving capabilities. A 2000 study by the Pew Internet/American Life Project found that "wired" churches' main Web site features were for encouraging attendance, posting faith information, linking to related sites and devotional material, and posting schedules and meetings.

According to Barna, churches will be struggling with the impact of technology on their ministries and look at "virtual faith" as a threat to the makeup, structure and size of their congregations. The BRG study states that within this decade, as many as 50 million people may rely solely on the Internet to meet their faith needs.

Yet the BRG study found that one out of three Protestant churches has a Web site. Of the remaining two-thirds, 19 percent say they definitely will have one in the next 12 months. This indicates that churches are slowly beginning to realize that in order to survive in a wired world, they must integrate the Internet into their ministries.

Setting up on-line donations

In today's busy world, people are seeking convenience. The act of making a single contribution on-line instead of by writing a check may not provide enough convenience for most people. However, if it's easy for repeat contributors to give on-line, significant advantages can be realized. In choosing a solution, look for timesaving features such as e-mail reminders for contributions, personalization features that allow a donor to save personal information (including a credit card or bank account for future transactions), and an on-line history of transactions for tax and record-keeping purposes.

Credit card donations
Credit cards are the most popular method of on-line payment, but it's necessary to have a merchant account specifically for on-line transactions. Even if there is already a merchant account for the bookstore or for other purposes, most retail merchant accounts prohibit the processing of on-line transactions. The merchant account typically has a setup fee, monthly service charges and transaction fees consisting of a discount rate of 2.5 percent to 4 percent, plus 25 cents or more per transaction. However, the merchant account alone does not include the ability to perform transactions. A processing gateway (which involves additional setup) as well as monthly and transaction fees provide this. The fee structures of both merchant accounts and gateways vary widely, so check several options before signing an agreement.

Electronic checks
Another popular form of on-line payment is electronic checks. These allow anyone with a bank account to perform on-line transactions. Since electronic checks have not been as widely used as credit cards, there are not as many providers for processing them. As with credit cards, there is a broad range of fee structures, so do the homework before signing an agreement. One major advantage of electronic checks compared to credit cards is that the transaction fees for processing checks is typically lower since there is usually not a discount percentage.

Security
When a Web site handles sensitive personal information such as credit card or bank account information, security is a major concern. Measures should be taken to protect this information. First, the servers must be protected using state-of-the-art intrusion prevention measures, including firewall protection and up-to-date software patches. Second, any page that contains sensitive personal information should be encrypted using SSL (secure sockets layer). This means that the data sent between the user's PC and the server is specially encoded so that it is impractical to decode it. Third, if the credit card information is stored in a database on the server, this information should be encrypted so that if a hacker gains access to the database, credit card information is impossible to decode. Credit card networks have instituted security requirements for merchants that process credit cards on-line.

In-house development

If a church doesn't have in-house personnel qualified to develop on-line giving solutions, it should search for a provider of on-line giving that meets its specific needs. Even if qualified personnel are available, carefully evaluating the costs for developing an in-house solution is important. It may be that an outsourced solution will save money, both in the short- and long-term.

Outsource provider

When looking at outsourcing on-line giving to a service provider, consider all of the factors above. In addition, understand the fee structure so that there aren't any surprises. Find out what name will appear on the donor's credit card or bank account statement. If the church's name does not appear, consider the amount of confusion and inconvenience this may create.

Tim Whitehorn is founder and president of ServiceU Corporation (Memphis, Tenn.), an application service provider that offers innovative, Web-based services for churches and ministries. For more information visit www.serviceu.com   or call (888) 638-7439.