A Complete Guide to Processing Fees for Online Donations





How to Give 100% of Your Donation to Charity


For companies looking to give to causes they care about, processing fees can be an ugly reality that means less of your money goes towards the nonprofits you support. Finding ways to reduce the processing fees you pay can help your company give 100% of your donation to charity, so that most of your money goes to supporting the cause. For CSR programs looking to make a difference, reducing administrative and processing fees can help your company make a greater impact—and there are easy ways to reduce the fees on your corporate charitable giving by finding the write online giving software and CSR management tools. 


What are processing fees?


Processing fees on donations given to charity come in two different forms, payment processing fees and platform fees, and often are charged by multiple parties throughout the transaction. Make sure you understand the difference, as how you can reduce processing fees for your CSR donations is different depending on which type you are dealing with.


Payment processing


Payment processing fees are charged by credit card companies and other financial technology (or fintech) companies to electronically move the money around. Usually, these fall somewhere between 2-3% of any transaction, and there’s little that can be done to control these (more on that later). When most people use their credit card to pay for goods or services at a business, the business absorbs that payment processing fee. When a person or organization donates to a nonprofit, the same is typically true. 


Platform fees


On the other hand, platform fees are more controllable. Platform fees are additional fees charged by the company that handles some of the more digital and visual elements of donations and payment processing, including the donation form itself and tracking all the data about donations for the nonprofit. Many of these platforms take an additional percentage from everyone donation given through their platform on top of the payment processing fees that are charged by Visa, MasterCard, or PayPal. Doing your research ahead of time on what the platform you use to process your company’s CSR donations can save you thousands of dollars, sending those savings directly to the nonprofits you support.



Why do processing fees matter?


When your company decides to sponsor a cause, the amount you donate can quickly shrink because of processing fees. Your $1,000 sponsorship gets cut down by a 2.5% online payment processing fee, then 5% more from the platform you use, and so it goes. What was a nice large donation can get whittled down to something smaller before it gets to the nonprofit partner you want to support. Some of this is unavoidable, but cutting down on processing fees can make a big difference for the causes you care about. For nonprofits with limited budgets, every extra dollar that comes in their doors helps to provide direct aid to those in need. Finding ways to streamline donations to nonprofits can reduce fees and put more money in the hands of those working on issues that matter to you.


How To Reduce Processing Fees for Your Charitable Giving


While reducing processing fees seems like a no-brainer, how to cut down on processing fees for online donations can be challenging. Here are a few ways you can reduce processing fees for your charitable giving and make sure your CSR program has the biggest impact.


Pick the Right Online Payment Tool


If you’re using a CSR management tool (which you should be—if not, check out our guide on how to pick the right one for you,  make sure you know how much your CSR management software is charging you to process donations to the nonprofits you care about. Different tools charge different fees, and many will take an additional percentage on top of the payment processing fees charged by your credit card provider. Look for a tool that charges a flat fee rather than a percentage of each donation to make sure your corporate charitable giving goes even further—tools like DonationXchange don’t charge any processing fees on your charitable giving, allowing you to send all of that money to the causes you care about. 


Use ACH or Direct Deposit Giving


Another easy way to cut down on processing fees is to move towards direct deposit or eCheck giving. Rather than giving through a credit card, directly depositing your donation to a nonprofit’s account through ACH is one of the least expensive ways to send money to the causes you care about. Your corporate charitable giving can easily transfer between your account and the nonprofit’s bank account electronically, cutting down on administrative time and security concerns while also keeping costs low. Have your nonprofit partners include banking information when you contact them to award a grant or sponsorship to make the process smooth and effortless. This is also one of the few ways to reduce the payment processing fees, which are harder to get around than platform fees on your online charitable giving. 


Cover the Costs for Your Nonprofit


If you’re donating directly to a nonprofit through their website or need to use a credit card, consider increasing your charitable giving to cover the processing fees. Many nonprofit online donation tools like DonationXchange allow you to simply check a box to cover fees for the nonprofit, ensuring that the full amount of your intended donation goes towards the cause. Many nonprofits really appreciate this as well, as it keeps things simple on their end and can boost their bottom line significantly, especially for larger donations.


Avoid Processing Fees for Online Donations with the Right Tools


Whatever cause you are looking to support with your CSR program, make sure that your charitable giving is going towards the nonprofit you care about. With simple online tools, direct deposit giving, and other solutions, you can make sure that your company’s charitable giving makes a significant impact and that your nonprofit partners feel supported.



 

 

Businesses choose DonationXchange to handle their charitable giving processes because our platform saves hundreds of hours in phone calls and administrative work. With DonationXchange, you can track your impact on the community and generate year end contribution reports to showcase the effects of your CSR efforts.

 

How DonationXchange Can Help:

• Create & Track Fundraisers, Scholarships, Grants & More!

• Manage & Grow Donor Base     

• Process, Track, and Analyze Donation Requests

• Manage Volunteer Opportunities   

• Supercharge Employee Engagement

• Champion the Causes that Matter to YOU!

 

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