Donors Cover Fees is a common strategy used by nonprofit organizations to help cover the costs of online donation software and payments. Most often, this is a checkbox that encourages donors to increase their contribution amount to cover fees.
Funraise's Donors Cover Fees model provides an effective Funraise platform fee of 0% for qualified transactions because Funraise only charges a platform fee when the donor opts in to cover fees. When the donor opts out of covering fees, Funraise does not charge a platform fee. Easy.
This model is not only popular with nonprofit organizations — Donors have also shown that they are happy to chip in. With Funraise, about 90% of donors cover fees. This saves your organization on software and processing costs because when donors cover fees, they cover the entire Funraise platform fee and a portion of processing fees.
In a nutshell
When a donor covers fees, Funraise assesses a 5% platform fee.
When a donor does not cover fees, Funraise does not assess a platform fee.
When a donor covers fees, they cover Funraise's platform fee and a portion of processing fees.
What are Transaction Fees?
Whether it's processing fees from your processor or platform fees from your fundraising platform, fees incurred with online payments are necessary to maintain the security and performance of online payment infrastructures.
With online payments, you can incur two fees: processing and platform fees. When a donor covers fees, they cover the entire platform fee and a portion of the processing fees.
Processing fees are required for online transactions because payment networks (Visa, MasterCard, etc.) charge the merchant (your organization) a fee to use the network. Processing fees can vary depending on the processor. Funraise Payments powered by Stripe enables 2.9%+30¢ for cards and 0.8% ($25.00 cap) for ACH payments.
Funraise platform fees cover the cost of the software. Funraise's Donors Cover Fees model provides an effective platform fee of 0% because Funraise only charges a platform fee if the donor covers the fee.
When a donor covers fees, Funraise assesses a 5% platform fee. When a donor does not cover the fee, Funriase does not charge a platform fee.
Donor Covers Fees V2 gives donors more control to select their preferred fee coverage amount with a fee slider, rather than a binary option.
The tables below show a common example of a $100 donation with Funraise Payments powered by Stripe and Donors Cover Fees. Keep in mind, other payment processors, like PayPal, have their own processing fees.
☝️ About 90% of donors cover fees
Donor Covered Fees?
Funraise Platform Fee
Donor Covered Fees?
Funraise Platform Fee
Donors Cover Fees on a Giving Form
As a final step in the donation process, donors can review their payment details and edit their fee coverage. By default, fees are covered.
When a donor clicks to edit their fee coverage, they can learn more and opt out of covering fees.
Good to Know
Transactions from recurring subscriptions created before the activation of this feature will continue to incur your contracted platform fee. This is because these donors did not have an opportunity to opt in or out of covering fees under this model, so we will not change the behavior of existing subscriptions.
Transactions from recurring subscriptions that were migrated to Funraise will incur your contracted Platform Fee.
In-person donations (Funraise App)
Transactions created through Funraise's App are not eligible for the Donors Cover Fees feature and will incur your contracted Platform Transaction Fee or a base Platform Transaction Fee of 2% for Enterprise plans and 3.5% for free plans.
Form V1 transactions
Transactions created through Funraise's Form V1 (legacy form) are not eligible for the Donors Cover Fees feature and will incur your contracted Platform Transaction Fee.
Operations Tip is not compatible with Donors Cover Fees
Funraise's Operations Tip is a legacy feature often used for a similar purpose as Donors Cover Fees. Operations Tips is no longer available on Giving Forms with Donors Cover Fees. Historic Operations Tip data will still be available in the platform.