NFPs Urge Importance of Cheques

The Australian Not for Profit sector has revealed the importance of donations via cheques as part of their fundraising efforts, according to Pro Bono Australia’s online Snap Poll.

The online poll came after Pro Bono Australia reported last week that public consultations had begun by the Australian Payments Clearing Association (APCA) – the payments industry self-regulatory body – into the future use of cheques.

More than 88% of survey participants say cheques are an important part of their continuing fundraising efforts across Australia. As many as 61.3% describe cheques as extremely important.

One third of those who took the survey say that their organisations receive up to 50% of their their donations via a cheque. Another 17.5% says three quarters of their donation come via cheques.  Only 16% say that less than one tenth of donations come via cheques.

The Fundraising Institute of Australia says if around 60 per cent of charities receive donations via cheques, then it is crucial there is further consultation.

FIA CEO Chris McMillan says many elderly donors operate cheque accounts and prefer to donate via cheque.

McMillan says that while there is a huge shift to online donations, not everyone feels comfortable using online donation methods, so cheques and credit card options still prevail.

She says charities would need to be given sufficient warning if changes occur so they can forewarn donors who may be caught up in such a move.

After consulting with its members, the FIA says it will make a submission to the APCA on the significance of cheques and other payment options for the professional fundraising sector.

While cheque numbers have been steadily declining for more than a decade, Reserve Bank of Australia figures show that cheque use in Australia has declined by more than 35% in the last four years. The total number of cheques used in Australia has dropped from 437 million in 2006 to 276 million in 2010.

APCA CEO Chris Hamilton says that APCA is keen to hear directly why cheques remain important for some Not for Profits and businesses.

Hamilton stresses that there is no pressure in Australia to come up with a date to abolish cheques but it is clear that they will eventually go away.

Hamilton says one challenge may be the large number of Not for Profit organisations without any resources for process enhancements, due to their low administrative budgets.

In the UK last week, the House of Lords re-opened debate into the proposal by the Payments Council to phase out cheques by 2018.

The UK Government argued that alternatives to cheques must be acceptable to small business and charities and that if cheques are abolished the Payment Council must introduce a paper-based replacement for them, causing heated debate and great concern by many UK charities. It is estimated that some 80% of UK donations are received in the form of cheques.

APCA will organise a series of round-table meetings with groups and organisations representing key users and acceptors. These round-table sessions will be held across the country during the eight weeks before submissions are due.

Participants will receive a briefing based upon the Consultation Paper and will be invited to make comments, raise issues and provide input.

A proposal paper presenting recommendations for the future development of the payments system will be released for further comment in the last quarter of 2011.Participants will be encouraged to make submissions after the meetings. The series of round table meetings will be supported by Peak Advisory Group meetings in the consultation period.

Information about the consultation including the Consultation Paper is available at www.apca.com.au/consultation.
Submissions are due by 29 July 2011.  

• Related article: The Future of Cheques for Not for Profits?

*Flickr Image by Salvation Army USA West via Creative Commons