GlobalGiving’s Disbursement Process – Part 1

Posted by Alexis Nadin on February 29th, 2012

Every month, GlobalGIving processes as many as 35,000 transactions and disburses hundreds of thousands of dollars to hundreds of organizations around the world. In January alone, GlobalGiving disbursed more than $2.3 million to more than 1,250 organizations in about 100 countries worldwide!  As our disbursement process continues to grow, we would like to give you as much information about your donations as possible. That is why GlobalGiving has dubbed 2012 the year of disbursements! This year, we are working hard to build a system that is:

  • more open, letting you know what money you’ve received, when you received it, and, eventually, we’ll be able to tell you how much money is pending for disbursement in real time;
  • more streamlined, making it possible for us to catch any problems before they occur, to save you time with your bank; and
  • more automated and efficient, so that we can get money to you sooner.

In the next three blog posts, we will outline our current process, provide answers to frequently asked questions, and introduce our goals for 2012 (and give you a sneak peek of a new feature soon to be up on the site)!

GlobalGiving’s Disbursement Process

Right now, GlobalGiving disburses funds at the end of the month after donations are received. So, if a donation is made in January, it will be disbursed at the end of February. Our disbursement team aims to get funds out the door by the 25th of the month, although sometimes it takes a few days less or more.

For international organizations, we only disburse after net $250 or more is pending to reduce the overall cost of wire fees and because of the limitations placed on us by FXecute.

GlobalGiving waits until the month after donations are received to reconcile donations to ensure financial security. Each month, donations on GlobalGiving’s site are reversed or charged-back. Although this is rare, GlobalGiving is not able to take the risk in disbursing donations that may later be reversed. When this does occur, our partners incur a negative balance for the amount that was reversed which can reduce or even delay future disbursements.

The Reconciliation Process

At the moment, donations are reconciled by one stellar individual: James. He spends several weeks each month reconciling donations. What does this mean?

1. First, he imports all contributions made to GlobalGiving, from www.globalgiving.org and our corporate sites, like Nike WEGiving, YourCause, MissionFish, etc., into the disbursement database.

2. During this process, James meticulously ensures that fees are accurately applied to each donation. On some occasions, donations made through our corporate partner sites have different fees than donations made on GlobalGiving.org. For example, donations made by Nike employees through WEGiving only incur a 5% fee on the donation and the match.

3. Next, he reconciles donations against credit card companies and PayPal. Here he is checking to ensure that donations have not been reversed and that they have been paid in full.

4. At this point, James reconciles all gift cards that have been redeemed on the website in the past month. In December alone 15,000 gift cards were redeemed on GlobalGiving. These nifty cards are a huge source of volume for GlobalGiving’s partners. Unfortunately, they’re also a lot of work for James. It takes him up to 3 days a month to reconcile all of these donations—taking funds out of large, one-time gift card purchases from corporate partners and applying them to hundreds of projects that have received gift card redemptions.

5. Finally, James processes any matching funds, bonus awards, or special grants being made to our partners. These special cases are not automatically included in the regular disbursement process and must be added manually.

Once James has finished reconciling all of the donations made in the past month, he passes the month’s disbursement information onto Barrett for the approval process.

Chances are you’ve interacted with Barrett in the past. Not only is he our wonderful Office Manager, there to greet you as you come in the door at GlobalGiving, but he also sends out all disbursement reports and handles most disbursement related questions that we receive.

The Approval Process

Before each disbursement goes out the door, Barrett looks at every single one (there were 1,250 in January alone!) to make sure the organization is approved to receive funds–that due diligence is up to date in our system and we have received the required quarterly reports. He also checks for special requests to make sure that we are meeting the needs of our partners.

Sending Funds

Once disbursements are approved and ready to go, it’s time to get the money out the door! At GlobalGiving, we offer 4 different ways for our partners to receive funds, depending on their location and preference: ACH, check, international wire, and FXecute.

ACH: ACH is a direct bank transfer from GlobalGiving’s account to the American accounts of our U.S. registered partners. This is our preferred method of disbursement for U.S. partners. It can take 1-3 business days for funds to reach your account.

Checks: Stuffed, stamped, and mailed by GlobalGiving’s fabulous interns, checks tend to arrive within 1-5 days after being sent. Once they leave our hands, your check is at the mercy of the U.S. postal system.  How to switch your disbursement method to ACH.

FXecute: Our newest disbursement method, FXecute makes it possible for GlobalGiving to disburse funds in local currencies, saving our partners money on wire transfer fees and currency conversions. Read more about FXecute.  It can take up to 2 weeks to receive your disbursement via FXecute, particularly if you are receiving an FXecute disbursement for the first time. Once the disbursement leaves our office there’s nothing that we can do to speed up the time it arrives in your account. If your funds are not received within 15 days of disbursement, GlobalGiving will work with you to investigate.

Wire: This disbursement method is for organizations based outside the U.S. with U.S. dollar bank accounts. This method incurs bank transfer fees and higher currency conversion rates than FXecute. Read more about FXecute.  It can take up to 2 weeks to receive your disbursement via international wire.  Once the disbursement leaves our office there’s nothing that we can do to speed up the time it arrives in your account. If your funds are not received within 15 days of disbursement, GlobalGiving will work with you to investigate.

Disbursement Reports

Disbursements are accompanied by a Disbursement Report which provides a complete list of all donations made during the disbursement period, including the donor name (unless anonymous), email address, and donation amount. The report also provides information about any the fees applied to each donation and includes both a gross and a net total of donations received.

The Disbursement Report is emailed to the disbursement contacts attached to your account, as designated by the Disbursement Form completed during the due diligence process. Your disbursement report can be sent to up to four people in your organization. To change your disbursement contact(s), please email projecthelp@globalgiving.org.

Disbursement reports are sent a few days after disbursements leave our office. Depending on your organization’s disbursement method (check, wire, etc.), you may receive your disbursement report just before or after your disbursement.

There is no way for us to time the report with the arrival of the funds in your account, although we are working on staggering reports based on disbursement method to reduce confusion.

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Phew, that’s a lot of information! Our hope is that this has given you deeper insight into our current disbursement process. Now stay tuned to read answers to frequently asked questions about disbursements and to learn more about our goals for improving this process in 2012. And, as always, if you have any questions please feel free to email us at projecthelp@globalgiving.org.

One Response to “GlobalGiving’s Disbursement Process – Part 1”

  1. Hi-
    When we signed up for a direct donation button on our website through Paypal, we gave them our bank account and routing number just like Global Giving. They then sent us two or three small amounts – about $.05 to “ping” us to see if everything was correct. When the money arrived we told Paypal it had worked, and then we knew we were set up correctly.
    Tom Carter