non-profit Donation Box - Copyright Howard Lake at Flickr Creative Commons


Processing donations on behalf of non-profits is a major lockbox vertical. Within the non-profit space, they refer to it as ‘caging services’. The lockbox service provider, in conjunction with a direct mail firm, perform this function in concert, with the direct mail company focused on outbound donation solicitations, and the lockbox company processing the inbound donations. The non-profit typically categorizes their solicitation efforts (also known as appeals) into two types.

The first type is derived from their existing donor database, and are comprised of individuals who have historically donated to the non-profit. The non-profit intermittently solicits these existing donors for new donations.  Because these folks have donated in the past, the non-profit maintains name, address, and contact info, along with a unique index called a donor ID in their donor database. Each solicitation letter and remittance statement has that donor ID printed on the bottom, so as the donations come in, the lockbox company can systematically attribute specific donations to individuals. This process typically is very automated for all parties involved.

The second type of solicitation effort is called an acquisition campaign, which is designed to attract new donors, a very important endeavor for non-profits. For acquisition campaigns, the non-profit typically procures a mailing list though external means, and sends a direct mail appeal to the people on the mailing list.  Unlike the first type, these individuals do not already reside in the donor database, so for each donation response the non-profit must find the corresponding record on the acquisition campaign mailing list, and transcribe that information into their existing donor database. A donor ID is then assigned, which helps categorize subsequent donations down the road.

As you can imagine, this donor onboarding process can get relatively labor intensive for the non-profit. Thankfully, some lockbox providers can help automate this process for non-profits. Ahead of the mail drop, the direct mail firm attributes a number (called a finder ID) to each record on the mailing list and uploads that list to the lockbox company. The mailed solicitations also have this finder ID printed on the return statement in lieu of a donor ID, and when donation responses start coming in, the lockbox company can match the finder ID on the return statement with its corresponding record on the mailing list, and produce a file with name, address, and other contact info along with the donation date and amount to send to the non-profit. This way, rather than manually transcribing newly acquired donors into their donor system, the non-profit simply imports this file, automatically onboarding these new donors with a single click.

Invoice and account matching is just one way that Lighthouse Payment Services continue to look for ways to add value and take remittance processing to the next level. If you’re a non-profit who is interested in our account matching service for your acquisition campaigns, contact us and we’d be happy to discuss options.