Stephen Mally Charities, Charity, Donor care, Fundraising, NFP, Non-profit, Nonprofit, Stewardship

Cheques are going away. Is your charity ready?

The Australian government has announced a comprehensive plan to phase out cheques, aiming to modernise the nation’s payment systems in response to the significant decline in cheque usage over recent decades. News reports have documented the fact that this transition poses both challenges and opportunities for charities, particularly those that have traditionally relied on donations via this payment type. Is your charity prepared for the time when donors are no longer issuing cheques for their donations?

Timeline for Cheque Phase-Out

The government’s proposed timeline for discontinuing cheques is as follows:

2025: Cease issuance of bank cheques.
2026: Cease issuance of commercial and government cheques.
2027: Cease issuance of personal cheques.
End-2028: Cease acceptance of personal, commercial, and government cheques.
End-2030: Cease acceptance of bank cheques and close the cheque system entirely.

Impact on Charities

For many Australian charities, cheque donations have been a significant source of funding, especially among older demographics who prefer traditional payment methods. A survey by Fundraising Institute Australia (FIA) revealed that:

12% of responding charities receive over 50% of their annual donations via cheques.
17% receive between 30% and 50% of their annual donations through this payment type.

Some organisations reported receiving up to 80% of their donations via cheques, highlighting the potential financial impact of the phase-out.

Preparations by Charities

In anticipation of the system’s discontinuation, charities are implementing several strategies to adapt:

Diversifying Payment Options: Organisations are expanding their donation methods to include online platforms, direct debit arrangements, and other electronic payment systems. For instance, Jesuit Social Services is introducing BPAY as an alternative for donors.
Educating Donors: Recognising that many cheque donors are elderly and may be less familiar with digital payments, charities are investing in educational initiatives to guide these supporters through new donation processes.
Enhancing Digital Infrastructure: Investments are being made in upgrading digital platforms to ensure secure, user-friendly experiences for donors transitioning from cheques to online giving.

Challenges Ahead

Despite these proactive measures, challenges remain:

Donor Retention: The shift away from cheques may alienate donors uncomfortable with digital payments, potentially leading to decreased contributions.
Operational Costs: Implementing new payment systems and conducting donor education campaigns require financial and human resources, which may strain smaller charities.
Accessibility Issues: In regions with limited internet connectivity, reliance on digital payments may pose logistical difficulties for both charities and donors.

Conclusion

The planned elimination of cheques from the Australian banking system marks a significant shift in the financial landscape, with profound implications for the charitable sector. While the transition presents challenges, it also offers an opportunity for charities to modernise their operations, engage with donors through diverse channels, and potentially reach new supporter demographics. By proactively adapting to these changes, Australian charities can continue to thrive in an increasingly digital world.