This update has been rolled out to all free customers and is available in beta for paid customers.

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 fee slider that gives your donors full control.

This 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 common strategy used by many 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. 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. Funraise's Donors Cover Fees model still supports an effective 0% Funraise platform fee for qualified transactions because Funraise only charges a platform fee when the donor covers fees. When the donor does not cover 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 cover fees, Funraise will assess up to 5% for the platform fee and your organization will receive the remainder to cover processing fees.

It's as simple as that. 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 an additional 3%. This 3% received by your organization is an increase over Funraise's previous model and, for most organizations, closer to your average 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, processing fees will always be charged.


Fee examples

The tables below show a common example of a $100 donation with Funraise Payments powered by Stripe and Donors Cover Fees V2 where the donor covers the default fee amount. Keep in mind, other payment processors, like PayPal, have their own processing fees.

Card Payment

Donation Amount

Donor Covered Fees?

Processing Fees

Funraise Platform Fee

Net

Amount

$100

Yes (+$8.00)

$3.43

$5.00

$99.57

$100

No (+$0.00)

$3.20

$0.00

$96.80

ACH Payment

Donation Amount

Donor Covered Fees?

Processing Fees

Funraise Platform Fee

Net

Amount

$100

Yes (+$8.00)

$0.86

$5.00

$102.14

$100

No (+$0.00)

$0.80

$0.00

$99.20



Did this answer your question?