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:
- Potentially increases revenue
- It's an easy ask with a high uptake rate
- Potentially helps donors understand overhead and transaction costs
- Helps to overcome objections to offering credit card acceptance
Cons
- 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
- It's not a mission-related ask, it's small-minded rather than inspiring
- 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
- 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.comStamford CT
@Sage70
isaac@sage70.com------------------------------
Original Message:
Sent: May 16, 2019 15:59
From: Julian Wyllie
Subject: Chronicle of Philanthropy - Seeking Insight from Nonprofits on Donors and Credit Card Processing Fees
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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