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.

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.

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 up to 5% for the platform fee. When a donor does not cover the fee, Funraise does not charge a platform fee.

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.

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 is close to the average processing fee.

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 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.

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

Card Payment

ACH Payment

Donors Cover Fees does not apply to all Transactions

In the following cases, a donor does not have an opportunity to opt in or out of covering fees so Donors Cover Fees does not apply. When Donors Cover Fees does not apply to a Transaction, your contracted Platform Transaction Fee or a base Platform Transaction Fee of 2% for enterprise plans and 3.5% for free plans will be assessed.

Operations Tip is not compatible with Donors Cover Fees

Funraise's Operations Tip is a different fee coverage model that has a similar purpose as Donors Cover Fees. Operations Tip is not available for organizations with Donors Cover Fees.

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