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Chronicle of Philanthropy - Seeking Insight from Nonprofits on Donors and Credit Card Processing Fees

  • 1.  Chronicle of Philanthropy - Seeking Insight from Nonprofits on Donors and Credit Card Processing Fees

    Posted May 16, 2019 16:00
    Hello,

    My name is Julian Wyllie. I'm a reporter for the Chronicle of Philanthropy in Washington, D.C.

    A colleague, Nicole Wallace, attended the recent NTEN conference and passed along an idea for a potential story mentioned at the event, which was related to credit-card processing fees.

    I'm hoping to speak to nonprofits that either individually or through an online platform ask donors to cover the credit card fee on behalf of the organization. I'm seeking anecdotes and data from organizations that are willing to explain why they ask donors to contribute this way, as well as why others may not.

    I'm in the early stages of reporting so let me know if you have time to speak about this or if there are groups you think I should contact. Thanks in advance for the time.



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    Julian Wyllie
    Online News Reporter
    The Chronicle of Philanthropy
    Office: 202-466-1726
    Cell: 317-493-9311
    Julian.Wyllie@philanthropy.com
    https://twitter.com/JulianWyllie
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    2020 Nonprofit Technology Conference Logo  w/ Baltimore Skyline


  • 2.  RE: Chronicle of Philanthropy - Seeking Insight from Nonprofits on Donors and Credit Card Processing Fees

    Posted May 17, 2019 09:43
    Julian,
    I have worked for organizations that did both. I would be happy to discuss this with you, both our reasoning and how it turned out. When we charged for credit card fees, we made it into an optional item where donors could check off to cover them. A great number chose to do so, I don't know the percentage, but I can tell you it was significant enough for me to remember it (30% to 70% best guess).

    Feel free to contact me directly and I'll be happy to provide you with more information.

    Marianna

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    Marianna Dostal
    Data Administrator
    Cleveland State University
    Cleveland, OH
    m.r.dostal@csuohio.edu
    (216) 687-3916
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  • 3.  RE: Chronicle of Philanthropy - Seeking Insight from Nonprofits on Donors and Credit Card Processing Fees

    Posted May 17, 2019 11:30
    Hi Julian,

    At Mental Health America, we recently implemented a peer-to-peer fundraising platform (Classy) that allows us to offer this option to our donors. We leave it unchecked by default. Happy to speak behind our reasons to do so.

    MHA has also seen a significant rise in donations coming to us from Facebook over the past year, which notably stands almost alone in covering all processing fees for donations through its platform. A small nonprofit I volunteer for on the side is actually choosing to use Facebook as its primary donation platform for this reason - we think this will be salient enough to overcome any concerns about privacy for a majority of potential donors. If it's relevant to your story, would be more than willing to talk about this.

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    Sachin Doshi
    Director of Development
    Mental Health America
    Alexandria, VA
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  • 4.  RE: Chronicle of Philanthropy - Seeking Insight from Nonprofits on Donors and Credit Card Processing Fees

    Posted May 21, 2019 10:59
    I've worked with a few organizations that wrestled with this question. Smaller orgs, in particular, seem drawn to this approach. Here are some of the positives and negatives of doing so:

    Pros:
    1. Potentially increases revenue
    2. It's an easy ask with a high uptake rate
    3. Potentially helps donors understand overhead and transaction costs
    4. Helps to overcome objections to offering credit card acceptance

    Cons
    1. For larger gifts, exposing the transaction cost can make the donor decide to write a check instead, but this may delay receipt of the gift, or even result in the check not getting written, for whatever reason
    2. It's not a mission-related ask, it's small-minded rather than inspiring
    3. It may be leaving a lot of money on the table, in the sense that if you're going to make an additional ask, you can make a larger ask for a meaningful aspect of your mission, instead of for 3% of the original gift
    4. Additional clicks in your checkout process increase cart abandonment

    In general, I've only favored adding in the fees if there's no other way to get the organization to approve online payments, or if an individual donor is covering these costs on the back-end. For organizations that are seeking to maximize revenue, it's generally more effective to increase the default giving levels, or to add a more resonant supplementary ask. However, for donors for whom this feels like a meaningful gift, it's a reasonable individual giving opportunity. Again, though, if a donor is willing to fund, eg $20k of transaction costs, you have to consider whether a different gift structure would work better, eg as a matching gift against increased pledges from the previous year, or new donor match, or 2nd special ask match, etc.

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    Isaac Shalev
    http://www.sage70.com
    Stamford CT
    @Sage70
    isaac@sage70.com
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