Consolidating Payment Processing, A Nonprofit Perspective with American Heart Association at IOFM...
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Consolidating Payment Processing A Nonprofit Perspective
#PaymentsSummit
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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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#PaymentsSummit
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Erin Westergaard
Client Director, CDS Global
@eewestergaard
#PaymentsSummit
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What industry do you represent?
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#PaymentsSummit
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Chip Sugrue
National Vice President – Customer Strategies/Affiliate Management Consultant; American Heart Association
@chipsugrue
#PaymentsSummit
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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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#PaymentsSummit
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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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#PaymentsSummit
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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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#PaymentsSummit
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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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#PaymentsSummit
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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
#PaymentsSummit
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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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#PaymentsSummit
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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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#PaymentsSummit
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questionsErin Westergaard @eewestergaard
Chip Sugrue @chipsugrue
#PaymentsSummit