While many churches are already reaping substantial benefits by offering their members electronic giving options, many others are trying hard to avoid it, mostly because it seems new and complicated. But it's really not that hard, and for many of your worshipers it will hardly be a new concept. So relax, take a breath, and read on for some electronic giving basics.

Most electronic giving programs use a form of payment called Electronic Funds Transfer (EFT)—a generic term for various paperless payments. The most common of these payments pass through the Automated Clearinghouse (ACH) network, established by the Federal Reserve in the early 1970s. Yes, thirty years ago!

An ACH transaction is an electronic file with instructions to move funds from one bank account to another. You've probably experienced ACH transactions before as a direct deposit of a paycheck or an automated payment. Even some Wal-Mart stores scan paper checks and convert

them into ACH payments. The National Automated Clearinghouse Association (NACHA) recently reported there were over 10 billion ACH payments in 2003, 12

percent more than in 2002. Initially limited to large companies and banks, ACH payments are now widely used by large and small businesses and nonprofits, including churches.

Getting Started
To start an electronic giving program, you could call your bank and ask how they can help. Many banks have software to help their clients initiate ACH transaction files. Some church management software packages have the ability to create ACH files. In that case, you need only ask your bank if they have a file transfer system to get the file to them.

Your easiest solution might be a third-party processor—a company that specializes in making EFT payments easy for their clients. They would offer the ability to create the file and to transmit it into the ACH network.

Once you have a way to create and submit ACH files, you need permission from your donors, of course. A simple form will do: "I (donor name) give St. Joseph's Church permission to debit my account (account number and routing number) in the amount of $X on the fifteenth of each month until I provide written notice otherwise." You need a record of their permission, their bank account and bank routing numbers, account holder name, amount, and date. Collect a voided check with the enrollment form to reduce data entry errors. With all this, you are ready to receive an electronic payment.

Common Objections
So what's stopping you from offering electronic giving to your members? Here are some of the objections we hear:

"Our members are too old and not tech-savvy." Congregants need to complete a simple enrollment form and hand it to you with a voided check. Many of your members are accustomed to automatic debits for insurance and mortgage payments, and your elderly members receive their social security payments through a direct deposit. Your program will most likely be better received than you expect, and you only need a few members to enroll to make the program worthwhile.

"We're a small church—it will cost too much." Electronic giving programs should net you an increase in collections, not be another cost for you. Consider that you will capture donations when people miss services, you will convert occasional attendees into regular givers, and people will tend to give more when authorizing a regular deduction. ACH transactions are attractive because they have low costs compared with other forms of electronic payment, such as credit cards. Some churches have urged donors to "consider increasing your monthly donation by $1 to help us cover the costs of EFT." Compare costs at your bank with those of a third party processor—even the smallest churches should benefit from a program.

"It interferes with presentation of the gifts in our service." To maintain the collection basket tradition and keep electronic donors comfortable, some churches mail coupons that say, "I donated electronically," which members can toss into the basket. They can achieve the same with brightly colored laminated cards that donors pick up on the way into services each week. These are reusable and help spread the word about electronic giving.

"We like the way we do it now. We don't want to change." Last year 65 million Americans made online bill payments, including donations and tithes to churches. When church members contribute via online bill payment, the bank most likely prints a check and mails it to the church. These bank checks can be difficult to track and reconcile. However, when you initiate the payments in the form of ACH transactions, you can produce reports and track donations closely. While you may not wish to change, your members will soon start to demand it. Better to explore the option before it becomes an issue for you.

One objection we never hear is, "We don't need any more time or money." Most pastors and churches have a long wish list of projects they'd like to accomplish if they only had more time and money. Electronic giving programs allow you to redeploy volunteers who count money and enter data, tasks that greatly diminish as more people donate electronically. With electronic giving, cash flow becomes more predictable. There will be less of a dip in the summer months, and no financial threat from an untimely snowstorm.

So reach for the phone and make that first call. Electronic giving can give your church revenue a boost, free up some volunteer time, and provide your members an option they want. It's not that hard. Really!

Matt Whitaker (Mwhitaker@smartpaymentsolutions.com) is the founder and president of a company that provides electronic payments services and cash management solutions. He is an Accredited ACH Professional (AAP) and has an MBA from the University of Chicago Graduate School of Business.