1. Don't Accept Online Donations
This day is age, this is very shortsighted. Don't under-estimate the number of donations you will receive. Most organizations that we discuss this with, give the answer, "Well, our users don't like to donate online.". Do you even provide them with the opportunity? Case in point, a year ago we convinced an organization to set up online donation through Paypal. They were hesitant and quickly forgot that it was even there on their site. They did absolutely nothing to promote or highlight it. They recently called me up and told me that, by chance their bookkeeper checked their paypal account to close it, and found several thousand dollars in there. Tons of donors had made contributions and they missed it, because they forgot to check.
2. Don't Make the Ability to Donate Obvious or Easy
Offering the ability to donate is one thing, make it painless is another. The fewer steps it takes someone to donate, the more likely they will. The whole process should take no less than 3 steps.
3. Use Third Parties to Accept Donations
Sometimes this is unavoidable. You will always need someone to be your payment gateway, Moneris, Paypal, Google Checkout or many others. But the less obvious you make it, the better. The perception that a potential donor's money is going to line the pockets of someone else, may keep them from doing it.
4. Don't Do Recurring Donations
You just took $20 from a donor. Done. Now what? What about if you hooked them in for $5 month ofor the next year? People are more likely to donate smaller amounts longer term. Get them early and get them forever.
5. Don't Recognize Donors
People need recognition. Give it to them. They made a difference; make them feel like it.