🧪 This feature is in a closed beta. Contact your Customer Success manager to learn more.

Why we've updated Donors Cover Fees

Funraise's first version of Donors Cover Fees was released in 2021 and has been incredibly successful, enabling organizations to reduce their fundraising costs. Since its release, we've gathered feedback from many organizations and one of the most common points of feedback is around enabling the donors to select their own fee coverage amount, rather than only being able to opt in or opt out of a preset fee amount. The biggest update in this version of Donors Cover Fees is a new range slider which gives your donors full control.

This closed beta update introduces a fee range slider that enables donors to easily opt in to a default fee amount or drag a slider to adjust the amount of fee coverage they would like to add to their donation. This model follows most of the general principles as the original Donors Cover Fees model, although there are a few important differences.

Wait, what is Donors Cover Fees again?

Donors Cover Fees is a popular strategy used by many nonprofit organizations to help cover the costs of online payments. Most often, this is a checkbox that encourages donors to increase their contribution amount to cover online transaction and software fees. The goal of organizations that use this strategy is to reduce the expenses of online fundraising by asking donors to chip in towards that cost.

Is the new version still a 0% effective platform fee?

Yes. With Funraise's Donors Cover Fees model, you receive 100% of a donor's intended donation amount—whether or not the donor opts in to cover fees.

This means that Funraise's Donors Cover Fees model provides an effective Funraise Platform Transaction Fee rate of 0% for qualified transactions. How? Funraise only charges a Platform Transaction Fee when the donor opts in to cover fees. When the donor opts out of covering fees, Funraise does not charge a fee.


How it works — on the Giving Form

Donors can review their payment details and edit their fee coverage as a final step in the donation process. By default, fees are covered.

When a donor clicks to edit their fee coverage, they can learn more and increase or decrease their fee coverage. Donors can also slide down to 0% to opt out of fees entirely.


Where do the fees go?

When a donor opts in to covering fees, Funraise will assess up to 5% for the platform fee and your organization will receive the remainder.

It's as simple as that. In this version, fee coverage is defaulted at 8%. The actual amounts received by both Funraise and your organization will be based on the amount chosen by the donor. Here are the possible outcomes:

In the case where a donor does not adjust the fee amount and chooses to add the default 8%, Funraise will first assess 5% as the platform fee and your organization will receive 3% back. This 3% returned to your organization is an increase over Funraise's previous model and, for most organizations, closer to your average external processing fees.

In the case where a donor decreases their fee coverage, Funraise will first assess up to 5% as the platform fee and the remainder will be received by your organization.

In the case where a donor increases their fee coverage, Funraise will first assess 5% as the platform fee and the remainder will be received by your organization. Funraise's updated model ensures that any fee coverage amount over 5% is received by your organization.

In the case where a donor decreases their fee coverage to 0%, Funraise will not assess a platform fee. Keep in mind, your external processor will still charge their fee.


How transactions appear in Funriase's platform

With this version of Donors Cover Fees activated, you'll see a few updates to the Transaction profile inside Funraise's platform. We've simplified fee reporting.

Donor Covered Fee shows whether or not the donor opted-in to cover any amount of fees.

Platform Fee Automatically Collected shows whether or not Funraise's Platform Transaction Fee was assessed at the time of the transaction. For Stripe and PayPal transactions, Funraise's Platform Fee is assessed at the time of the transaction. If the fee is not collected at the time of the transaction, the fee will be billed on the next monthly usage schedule.

Platform Fee Amount is the platform fee amount assessed by Funraise for this transaction. Remember, this fee is only assessed if the donor chooses to cover it and can vary based on the fee amount chosen by your donor.

You'll also notice a new data point called Donation Boost.

Donation Boost is the amount of fee coverage that Funraise has returned to your organization. Many organizations use this to cover external processing fees. Keep in mind, that this amount can vary based on the fee amount chosen by your donor.


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