The Truth About Donation Fees


Costs associated with donations—donation processing fees—have been a hot topic of conversation lately. While the actual cost of processing donations varies, many believe that corporate giving donation fees are too high and are discouraging companies from giving more to causes they care about.

Corporate giving platforms are, by and large, the most efficient way for companies to make donations to charitable organizations. They save time and cut down on administrative work for all parties involved. For example, checks—which are still a surprisingly popular way to make donations—require a lot of administrative resources to receive and process. Donations made by check are more expensive for donors to use and more expensive for charities to receive. This is why choosing to donate through an online platform (via electronic fund disbursement) is the best way for companies to award grants, matching gifts, and other corporate donations.

 

But what about the fees?

Corporate giving software companies typically charge anywhere between a 2.9-10% fee for donation processing. These companies claim the extra fee is going towards covering administrative costs. At DonationXchange, we believe in maximizing your charitable impact while minimizing costs. That is why our extra donation fees do not exist. All administrative tasks are covered by us. The only costs associated with donations made on our platform are ACH fees, which cost a fixed rate of $2 per batch transaction--they are not based on a percentage of the funds being donated. Most of the time, our clients choose to utilize our automatic payroll deduction feature, to eliminate the need for credit cards, and thus, eliminating all extra costs associated with individual employee donations. Without these extra fees, corporate donors and their employees can give more to the causes that matter most to them. 

*Fees and costs are approximate

 

DonationXchange was born out of a reverence and respect for the philanthropic process and we have never charged our clients extra fees. Recently, other companies have begun to share our belief that more money should go to the charities. GoFundMe and Facebook recently took steps to eliminate some of the fees associated with running fundraising campaigns on their corresponding platforms. GoFundMe, a major player in personal fundraising, has removed the 5% platform fee it charges campaigns launched by individuals. The site will now offer donors the option to provide a tip to cover campaign fees. For now, the platform fees will still apply to campaigns launched by organizations. Facebook took the opposite approach by electing to waive its platform fee for organizations (including all payment processing fees) while retaining fees for personal fundraisers. This is a big step in the right direction and will allow millions of additional dollars to flow to worthwhile causes.

 

The Bottom Line

Processing donations does cost money. Administrative tasks, tax receipts, thank you letters, etc are just some of the things that take up a charity’s resources when receiving a donation. The DonationXchange model covers all the associated costs of donations in order to take the burden off of the charities, eliminate processing fees for donors, and ultimately put more dollars towards good causes.

 

Find out how to boost your corporate giving programs while saving time and resources with the DonationXchange Philanthropy Platform. Email sales@donationx.org or call 847.513.6460 Ext 2





 
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