Healthy nonprofits appreciate efficiency.
Why make more work than you absolutely need to?
Determine the tasks you both can and absolutely need to do yourself, then delegate/direct everything else to employees, volunteers, or outside partners - paid or otherwise.
If you don’t have any specialist web designers on your team or among your volunteers, you could spend substantive time, effort, and money on the necessary software, skills, servers, and systems to set everything up.
Or you could pay someone to do it for you.
Doing everything yourself is something you ‘can’ do, much like how you could engineer a mobility scooter to break the land speed record. But why would you want to? Even if you could take it apart, the jet engines would overburden even the biggest 4x4 car boots, and the exhaust plumes wouldn’t make you any friends on the pavement.
This is what you need to be thinking about when you imagine connecting your nonprofit’s own Stripe account to a digital donation platform.
Yes, you could do something like that. You could do it all yourself, set it up, and have your donations sent directly to you in this fashion.
But why would you want to?
When you could save yourself a lot of hassle and bring in a Merchant of Record like Everfund.
What is a Merchant of Record?
A Merchant of Record is a body with a particular type of legal standing.
Specifically, the standing to handle payments, absorb legal liabilities, and generally bear the ultimate responsibility over the transaction.
In the for profit sector, this includes things like handling taxation and other related regulatory issues. A major issue, considering that according to YouGov, the British small and medium enterprise sector lost £13.6 billion to failure to properly handle legal issues.
While most nonprofits don’t have to concern themselves with taxes in the same way, there are still plenty of areas that need oversight. The kind of oversight that it’s doubtful you have on-hand experts to deal with, and might be the kind of thing it’s better to delegate elsewhere.
What do Merchants of Record do?
Merchants of Record have to handle the many difficult aspects of payment processing and financial monitoring that are involved in the background of every last transaction. Including donations of every size and kind. Issues like the following:
Accounting for anomalies - MoRs have to keep a careful watch on where and how money moves to prevent fraud or attempts at money laundering.
Engage with errors - MoRs are where the buck ultimately stops on the technical side of things. They need to be sure that software and sundry supporting systems work in sync when money is in motion.
Regulate the refunds - Whether it is an active case of a purchase needing a refund, or the more contentious issues of chargebacks or other such areas, MoRs are the people than handle such matters.
Designate all details - As the name suggests, MoRs are the ones who have to keep record and track the details of the money’s movement, ensuring everything gets to the people who legally speaking own it.
Tackle the tax - In the event where things like VAT or other taxation types come up, it is the job of MoRs to handle this properly so that both HM’s Treasury and your nonprofit’s treasurer have the right accounts in the right place.
Why can’t we just use Stripe to do this?
Stripe isn’t a Merchant of Record.
Stripe is a payment provider.
They are ultimately just moving the money. They are not ultimately responsible for legalities of things.
If this seems confusing, think of it like this.
Stripe is a car.
A MoR is a taxi.
A taxi and its driver and company are the ones who pay for fuel, who have to worry about the speed limits while driving, who cover issues around car insurance and vehicle tax etc.
A car is just a tool. It has no responsibilities in this regard. All those responsibilities lie with the person using it and owning it.
If you have a Stripe account, you are the one responsible.
If you use an MoR, they help you by processing, mangaing, and handling everything. They are the ones responsible for the regulatory and processing sides of things.
Everfund - your ever-helpful MoR
Everfund is a Merchant of Record.
We have both the legal standing and wealth of experience needed to keep track of where your money is going and when. All of which means you don’t have to deal with that.
While in theory you ‘could’ do this yourself, why would you want to when it takes more time, more money, and leaves you vulnerable to more costs if it goes wrong.
Discover how Everfund’s MoR status could help your nonprofit, as well as the host of other things we do.
Speak to Everfund today.
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