Donors can give online by entering their bank information, or they can request an admin add the bank account to their profile. In either case, the bank account will need to be verified, either through logging in or micro-deposit.
If a donor gives a 3rd party authority to reach into their bank account to withdraw money, the 3rd party system needs to know that the donor actually controls that bank account.
Examples of 3rd party systems:
- Investment brokers (like Vanguard and Fidelity)
- Payment processors (like Stripe)
- Other banks
Verification shows the donor has access to the bank account being connected, they've given permission to withdraw money, and they have the right account. It lowers the chance of fraud and incurring fees from the bank for errant withdrawals.
After a bank account has been verified by a donor, the donation goes through a lifecycle, which lasts around two weeks:
- The ACH donation is initiated by the donor, by an admin on the donor's behalf, or by the system (in the case of a recurring donation).
- The ACH donation is marked "pending" while the donor's bank completes the charge. During this time, there is a two hour time frame to cancel this transaction, if the donation or the amount was made in error. After that, the donation can neither be edited nor refunded until it clears.
- If the donation fails, the donor is notified via email, and the donation is marked as failed in the donor's account history.
If the donation succeeds, the pending status is removed. The fund allocation can be edited by the admin, providing the total amount of the donation is the same after editing, and the donation can be refunded.
In case of a mistake when giving, ACH donations will not start the process until 120 minutes after the donation is initiated by the donor. If a donor needs to cancel an ACH donation within that timeframe, an Administrator can delete the donation before it's processed.
ACH donations can take anywhere from 2 to 5 business days to post to Stripe and Giving as successful donations. Some banks add an additional 2-3 business days if it's the very first time the donor has initiated an ACH donation through Giving. It's common for a bank to take extra caution when someone new (in this case, Stripe) is making an ACH withdrawal request for the very first time.
Stripe has a rolling 2-day payout schedule, so an ACH donation will go through Stripe for another day or two before it's queued for a payout to your bank. It will take another 5 business days for a Stripe transfer to make its way to your church bank account.
This makes the complete lifecycle of the donation around 2 full weeks (or longer if there's a US Federal holiday during those weeks) from the time the gift is given to the time you actually see those funds in your church bank account.
Although that is a long time for the first donation, the up side is that it costs you $.25 in processing fees to transfer any donation, such as a $10,000 donation.
You can cancel ACH donations for up to two hours before it's submitted to Stripe. This gives your donors a little breathing room and a much easier recovery path if they receive their donation receipt email and realize they've added an extra zero to their gift. After all, ACH donations take a long time to process and it can be pretty painful to get it wrong.