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The Salvation Army, one of the country's oldest charities, is accepting donations made with debit and credit cards during its annual holiday Red Kettle campaign, the charity's most-enduring annual fund-raising event. The organization's goal: appeal to younger donors.
"We want to connect with the next generation of donors," says Dawn Wright, director of marketing and communications for the Salvation Army's Southern California division in Los Angeles. "We realize many Gen X and Gen Y consumers pay electronically because they don't carry cash. Acceptance of cards enables us to keep up with donor trends."
The Los Angeles unit is one of a number of Salvation Army divisions deploying wireless payment terminals next to the red kettles, which consumers may use to deposit change, banknotes and sometimes gold coins. The Salvation Army launched the Red Kettle campaign in 1891 in San Francisco.
The organization is accepting donations made with debit and credit cards in more than 100 cities, using 300 wireless-payment terminals, after tests last year in three cities found that consumers tend to donate more when using plastic.
Salvation Army units in Dallas, Los Angeles and Colorado Springs, Colo., tested card acceptance with 30 wireless-payment terminals during last year's Red Kettle campaign, Major George Hood, the Salvation Army's national community relations and development secretary, tells ATM&Debit News.
In Dallas, the average donation rose to $14 from $2 when consumers paid with plastic, according to a Salvation Army spokesperson at the company's headquarters in Alexandra, Va.
Wright concedes donations last year in her district initiated with credit and debit cards were relatively small. The Southern California division raised $14,000 from donations made with plastic; it generated $2 million in total donations during the campaign, she says.
"But we started late, two weeks before Christmas," Wright says. "This year we started Thanksgiving Day, the traditional start for the Red Kettle campaign, and we doubled the number of locations to 43 this year from 20 last year."
Campaign Starts Thanksgiving Day
The Salvation Army kicks off its Red Kettle campaign each year during the halftime ceremony of the Dallas Cowboys Thanksgiving Day National Football League game. The campaign ends in most cities Christmas Eve, but some districts end theirs on New Years Day.
Last year, the Salvation Army raised a record $130 million in Red Kettle donations nationwide. Hood says less than 1% of kettle donations resulted from donations made with credit and debit cards.
The Red Kettle campaign accounts for less than 10% of the Salvation Army's yearly fund raising, which is about $3 billion annually, Hood says.
The charity spends the funds on holiday meals, toys for children and food boxes for families in need, Wright says.
Accepting cards was a learning experience, says Hood. "We wanted to know if consumers would trust us with their credit card information, and if they would stop in the cold weather and make donation with their cards," Hood says.
Card acceptance is another alternative to dropping coins in the red kettles. Cardholders also can donate funds online to the Red Kettle Campaign, another appeal to consumers who prefer paying online.
"We started online donations five years ago. It's small, but it grows every year," Hood says. Consumers also can donate to the campaign through Facebook.
The Salvation Army is a decentralized organization that operates through four territories in the east, west, south and central United States, and the territories decide on their own which payment terminals they will use, says the Salvation Army spokesperson.
Regions within territories also can decide which vendors to use.
The regions deploy the kettles in locations with heavy foot traffic, usually outside of large stores and shopping malls.
The Southern California Region accepts card donations using First Data Corp.'s FD400 wireless-payment terminal, Elizabeth Grice, a First Data spokesperson, tells ATM&Debit News.
"We are providing the Salvation Army 300 terminals, mostly in the Southern Region, at a very discounted rate through our joint venture with Banc of America Merchant Services," says Grice, noting some of the terminals are located at Salvation Army locations in Los Angeles, Chicago, New York and in Wisconsin.
A Simple Process
Consumers swipe their cards, type in their donation, confirm the amount, hit enter and the payment terminal prints two receipts, one for the consumer and another for Salvation Army.
The Salvation Army volunteer drops the receipt in the red kettle.
"The process takes two minutes," Wright says.
BofA Merchant Services charges the Southern California division 25 cents to accept PIN-based debit cards, and 1.79% of the donation amount plus 20 cents when donors use credit cards.
The processor charges 2.89% plus 20 cents to accept American Express cards, Wright says. Hood says the rates are very discounted for the Salvation Army.
The Southern California division switched to using First Data's from U.S. Bancorp after last year's pilot because of financial reasons, Wright says.
Elavon Global Acquiring Solutions, an Atlanta-based subsidiary of U.S. Bancorp, processes card transactions for the Salvation Army's west territory, which includes Arizona, California, Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Texas and Utah, says Teri Charest, a U.S. Bancorp spokesperson.
Elavon provides Salvation Army volunteers VeriFone VX610 wireless terminals.
In Colorado Springs, during a rally to promote the start of the Red Kettle Campaign, former Dallas Cowboys running back and Heisman Trophy winner Tony Dorsett swiped his card in a VeriFone VX610 wireless terminal.
The Salvation Army is smart to embrace card acceptance to appeal to younger consumers, contends Daniel Borochoff, president of the American Institute of Philanthropy, a Chicago-based clearinghouse for charities.
"It is really important to get [consumers] in the habit [of giving] while they are young because when they grow older and have more money, [giving] will become routine," he says, noting few other charities accept cards while taking donations on the street.
Indeed, the Salvation Army recognizes the shift to electronic donations and is benefiting from the transition, Staci Mann, spokesperson for the Network For Good, a Bethesda, Md.-based nonprofit organization that monitors online donations to charities.
"The Salvation Army's idea is brilliant because the organization is benefiting from the card effect," Mann says. "Consumers donate more when using their credit cards because of convenience."
Wright agrees.
"Usually consumers drop pennies, nickels and $1 bills into the kettle and, very occasionally, $20," she says. "But I have not seen a card payment for less than $5." ATM
