How Do You Handle Donors Who Opted To Cover Processing Fees?
Published
Overview
You can compare everydayhero fees to card processing fees. All cards processed in BBMS (or any gateway) have a fee, but that has absolutely no impact on what is recorded in the database or sent to the finance system. A $20 donation with a $2 card processing fee doesn’t ever - anywhere - change to be $18.
Blackbaud's CRM databases act as a sub-ledger. Gross amounts should go into the CRM and come out of the CRM to be posted to finance. Fees and payments are then accounted for in the finance system, to get the correct balance. Fees shouldn’t be taken into account in the fundraising CRM.
Scenario #1
Your donor DOES NOT elect to cover fees using everydayhero's Donor Cover feature
Your donor makes a $100 donation. The processing fees associated with this gift are 8%, or $8. Essentially, your organization receives a gross donation of $100, net donation of $92.
How do you thank the donor and record this gift in your fundraising CRM, like Raiser's Edge or eTapestry?
You thank your donor for $100 (full gift amount). The accounting entry would be a credit to Contributions of $100, Debit to cash of $92, and Debit to Expense (bank charge or fundraising expense) of $8.
Scenario #2
Your donor DOES elect to cover fees using everydayhero's Donor Cover feature
Your donor make a $100 donation. The processing fees associated with this gift are 8%, or $8. Essentially, your organization receives a gross donation of $108, net donation of $100. Â
How do you thank the donor and record this gift in your fundraising CRM, like Raiser's Edge or eTapestry?
You thank your donor for $108 (full gift amount). The accounting entry would be a credit to Contributions of $108, Debit to cash of $100, and Debit to Expense (bank charge or fundraising expense) of $8.
HINT: You ALWAYS record the TOTAL gift amount in your fundraising CRM. You can worry about the details with processing fees and such in your finanace system.
Want to learn more about everydayhero's Donor Cover feature? Check it out here.
You can compare everydayhero fees to card processing fees. All cards processed in BBMS (or any gateway) have a fee, but that has absolutely no impact on what is recorded in the database or sent to the finance system. A $20 donation with a $2 card processing fee doesn’t ever - anywhere - change to be $18.
Blackbaud's CRM databases act as a sub-ledger. Gross amounts should go into the CRM and come out of the CRM to be posted to finance. Fees and payments are then accounted for in the finance system, to get the correct balance. Fees shouldn’t be taken into account in the fundraising CRM.
Scenario #1
Your donor DOES NOT elect to cover fees using everydayhero's Donor Cover feature
Your donor makes a $100 donation. The processing fees associated with this gift are 8%, or $8. Essentially, your organization receives a gross donation of $100, net donation of $92.
How do you thank the donor and record this gift in your fundraising CRM, like Raiser's Edge or eTapestry?
You thank your donor for $100 (full gift amount). The accounting entry would be a credit to Contributions of $100, Debit to cash of $92, and Debit to Expense (bank charge or fundraising expense) of $8.
Scenario #2
Your donor DOES elect to cover fees using everydayhero's Donor Cover feature
Your donor make a $100 donation. The processing fees associated with this gift are 8%, or $8. Essentially, your organization receives a gross donation of $108, net donation of $100. Â
How do you thank the donor and record this gift in your fundraising CRM, like Raiser's Edge or eTapestry?
You thank your donor for $108 (full gift amount). The accounting entry would be a credit to Contributions of $108, Debit to cash of $100, and Debit to Expense (bank charge or fundraising expense) of $8.
HINT: You ALWAYS record the TOTAL gift amount in your fundraising CRM. You can worry about the details with processing fees and such in your finanace system.
Want to learn more about everydayhero's Donor Cover feature? Check it out here.
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everydayhero Blog
06/29/2017 12:37pm EDT
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I realize this is an old thread, but hoping someone may see this. How do you setup the grid to have the net cash and fee expense flow through to Financial Edge in the automated API? Currently we are seeing the full cash amount. This causes us to have to make an additional journal entry in Financial Edge and makes account reconciliation more challenging that it needs to be.
Hi Lori! Would you mind posting this question in the discussion forums to get an answer? Thanks!
Q: What do development/advancement departments think about viewing a $108 gift in their fundraising CRM versus the $100 net gift amount?