Tithing at ATM kiosks offers nebulous rewards

By Kay Bell • Bankrate.com

Even those with just a passing familiarity of the Bible know that "for everything there is a season, and a time for every purpose under heaven."

Few, however, would have foreseen the opening verse of Chapter 3 of Ecclesiastes as a premonition of ATMs in churches.

Marty Baker, lead pastor at Stevens Creek Community Church was among that small group keeping an eye on possible changes in how worshipers financially support their faiths. Three years ago, Baker decided it was the appropriate time for Stevens Creek to embrace electronic giving, and he created a company to produce ATM-like kiosks where congregants can use plastic to tithe.

Now, there's no more waiting for the passing of the plate for debit or credit card-carrying members of Baker's Augusta, Ga., church.

Instead, they can use one of the four e-giving stations located in the church's atrium. So far this year, Stevens Creek members have electronically donated around $200,000. The annual budget of the Church of God-affiliated ministry runs between $1.5 million and $2 million.

Baker is confident that e-giving will continue to grow -- at his church, as well as nationwide. Since Baker and his wife launched Automated Giving Solutions LLC, their separate, for-profit kiosk company that is marketed as SecureGive, they have placed the devices in eight other churches and are expanding. An Oregon ballet company soon will be utilizing a SecureGive kiosk, just in time to accept payments for its production of "The Nutcracker."

The key benefit for churches and other nonprofits is that they get some donations they might not have received or received as quickly. The key benefit for donors is that they can give in a familiar way that also, in some cases, gives back to them via their cards' added benefits.

Genesis of the new system
"About three years ago, we were going through a capital campaign at Stevens Creek," says Baker. "In doing so, you look at it from a corporate standpoint and also personally.

"I personally don't carry cash or a checkbook. I live life with debit card in hand and got to thinking that there are other people just like me. If they were prompted to give (to the church campaign), how would they?"

So, Baker began his search for a more modern way for church members to contribute.

"I thought, surely there is somebody out there that provides this technology to churches," he says. "The companies all said that's a great idea, but we don't do that. Several months passed and we (Patty, his wife and business partner) finally decided to provide this service for our church and other churches."

Church times are a-changing
Baker characterizes e-giving as a way for members to contribute in a way they find "culturally relevant." While such worldly considerations might strike some congregations as unseemly, they are embraced by ministers and members of the church that is regularly referred to as "The Creek."

Most churches today have an online presence where members will find information on services, scripture references and details of church projects. That information is part of Stevens Creek's Web page, too.

But you'll also find sermon podcasts, downloadable via iTunes. If you prefer, you can watch them online, along with a music-video style opening by Stevens Creek's "house band," complete with electric guitars.

So the installation of church-specific ATMs was, in Baker's and his congregation's view, a logical next step.

"What we realized is that the culture has advanced," says Baker. "We don't need to water down the message, but understand the culture, so we're able to speak into the lives of our members."

The church does that in its dress (no suits required on Sundays), its music (the band instead of a robed choir) and now, says Baker, in the way to bring offerings. The church's demographics also make it more open to change. Of its about 1,100 members, 70 percent are ages 40 and younger.

Work on the system began in the summer of 2004. By the next spring, a system designed on an e-commerce model was placed at Stevens Creek. Essentially, it was a Web site on a kiosk.

"The first year, we received $100,000 on that unit," says Baker. But the bank fees and associated costs of doing business prompted a system re-evaluation.

"We took a closer look with an eye toward keeping more money in the ministry," he says. "We decided to offer PIN-secure debit giving and revamped the application into a self-service giving kiosk. It's made a significant difference, in both bank fees and more money for the church."

Forsaking fees
Ah, yes, fees. Even when trying to render unto God, it's impossible to forget about that portion that goes to Caesar or his agents.

As with purely commercial transactions, each credit card swipe generates a fee of around 1.9 percent of the amount for the processing company. There's also a fee of 30 to 35 cents for running the card through the reader.

So does that mean the church member will see an few extra bucks taken from his or her account when a gift is made at a kiosk, similar to the charges at many secular ATMs? No.

"The church absorbs the fee," says Baker, who adds that although SecureGive is a for-profit company, he doesn't view the fees as a way to make money. "We couldn't survive doing that."

Instead, the bulk of the business's income is from sales of the machines, which cost between $2,000 and $5,000, depending upon how the purchaser wants the unit configured. SecureGive also charges a $50 monthly fee that covers, in part, processing fees and support services.

But the main reason for creating the company, says Baker, was to find a way to encourage giving and keep more of those gifts in the ministry.

"If you donate $1,000 to your church on a Web site, it will cost the church $20 to process it. If you donate $1,000 with SecureGive's PIN debit, it will cost the church about a dollar to process that gift."

The difference? The cost to run a debit transaction is the interchange rate and a swipe fee, which combined is around $1 per transaction.

Essentially, the church takes a small hit on kiosk donations. But the givers are happy because the transaction is easy and costs them nothing. Many, in fact, choose to use plastic so that they can more quickly earn airline miles and other card bonuses.

From the church's standpoint, since it eats the fees, it technically receives slightly less from each e-gift. The trade-off, however, is that the church likely receives a kiosk contribution from a member who might not have given that day because he or she didn't have a checkbook or cash on hand.

Convenience for the cashless
Penny Oates is just such a cashless congregant. A five-year, pre-kiosk member of Stevens Creek, she now gives regularly via the system, drawn by its convenience. "I use my debit card for everything," says Oates. "As we speak, I have no cash in my pocketbook."

Oates also likes the speed of the transaction. After a member initially signs into the system, on each subsequent use he or she simply has to type in an identifying code and donate. "It's a quick transaction, so quick it's literally two minutes," she says.

As with an ATM, the machine produces a receipt slip for the donor. Actually, says Baker, a kiosk contributor gets three separate gift confirmations. In addition to the receipt at the time of the transaction, an e-mail is sent to the giver, thanking him or her for the gift and noting the specific amount donated.

Finally, the information is passed along to church management, says Baker, which then sends out a third official church receipt.

All this paperwork might seem a bit excessive, but in light of newly enacted tax laws, it could come in handy. Previously, the IRS required receipts when gifts exceeded $250. Beginning next year, if a donor is questioned by a tax examiner, he or she must produce a receipt for any gift, regardless of its size.

The kiosks also can be programmed for special church projects. Following Hurricane Katrina, Stevens Creek members could target their donations to a fund designated specifically to aid storm survivors. Another church is tracking kiosk gifts delegated to the church's Central American missionary to measure how electronic donations compare to money collected in more traditional ways.

Credit and debit
Although Oates uses her debit card, she and other Stevens Creek members could opt to charge their donations.

That doesn't sit well with some churches.

"A kiosk doesn't go in every congregation," says Baker. "Some will think this is like the money changers (in the temple). But we see it as a way for our church members to give in a very private way, as a part of their expression of worship."

Other congregations have a problem with credit card gifts.

"For some, credit card charging is a cringe factor," says Baker. "They have a problem with debt and (the credit option) goes against their core values." In those cases, SecureGive offers a unit that accepts debit cards only.

As for Stevens Creek, Baker says the church doesn't encourage contributions that put members in personal debt. "We view (the kiosk) as a way to make giving convenient."

That perspective is shared by ministers and members of Family Church in West Monroe, La. A kiosk has been in that church's foyer for about four months, and Baker says it has had the strongest start of any church that's adopted the system so far.

Still, the numbers are relatively small. Terry L. Taylor, executive pastor at Family Church, says the latest count is around 30 members giving by kiosk. However, that represents a steady growth curve, from 10 the first month, to 15 the next, 25 in the third month and now 30. Average church attendance is around 750.

"Our church has always been open to forward kind of things," says Taylor. Church leadership approved the system at the first meeting it was discussed, and Taylor says so far no member has complained about the kiosk.

As for the amount of money given by Family Church members, Taylor says it's not a huge percentage.

"I would be shocked to see if it's 10 percent," says Taylor, referring to the amount of overall church contributions made at the kiosk. "We've learned to go into things slowly, so we haven't put a big push. But those who use it are enthusiastic."

Taylor says most of the people who give by kiosk were already giving to Family Church the old-fashioned way. The first to adopt the system, which accepts credit or debit cards, were members with reward program cards.

"They're very conscious of travel miles. They're glad to have another way to contribute and increase their card's bonus rewards. They now get eternal rewards and credit card rewards, too," says Taylor, only partially joking.

-- Posted: Dec. 18, 2006