Donor paying credit card fees - Have any of you dealt with this?

Sandra Moore

Hello. Though this is my first question under this account, I am not new to Raiser's Edge. I have been a DB manager for 10 years, semi retired, and am now doing some consulting work assisting my former employer in transitioning and training their new DB manager. (Former one recently took a new position elsewhere.) I have also been asked to help with some cleanup etc that has gotten a little behind this past year while routines were so disrupted due to the Pandemic. Since I last worked in their database, they switched from Net Community to a third party vendor for processing online gifts. It has the option of allowing donors to pay for their credit card fee, which most choose to do.

Right now, these credit card fee gifts are being counted as separate gifts, which makes a mess of their gift record if they are making recurring donations. Line after line of under one dollar donations. Yuck. Fortunately, these gifts do have their own fund name and campaign, so they can be separated out if desired, but I don't like the messiness of it. Yet, their may be no other option than to live with the clutter. I do not believe they want them combined with the same fund/campaign as the primary gift, as that will mess with amount raised for those funds/campaigns. Split gifts have their own issues, but in the end that may be the best way. Would love some input on this from the community. Thanks!

Rebecca Campbell

Good Morning Sandra,


Our practice is the Donor gets full credit for their gift. The credit card fees are not taking out of their donation, because we consider it a cost of doing business. It's not the donors fault that there are fees, and the fact that some are paying the fees, they get full credit for the full amount of their gift. It is recorded in their R.E. records as such. On the accounting side, they probably have to account for the fees, but the donor does not.


Donor's donation $50 + $2 CC fees = $52. If the Donor pays the fees they would get full credit for the $52. If the Donor chooses not to pay the fees they would still get full credit for the $50. No CC fees are taking out of the Donor's donation at any point whether they pay or not. Other business practices may be different, but this has been my experience, and with previous companies I have worked for as well. It was the same thought process; the CC fees are a cost of doing business, and the Donor receives full credit for the amount they paid.


I hope this helps.


Rebecca

Faith Murray

I think you can legitimately take it either way. Realistically, when we send a direct mail campaign, and get a $50 check back, most of us don't take $2 of the gift and post it to operations (the cost of the postage, stationery, and consequent thank-you letter postage). Instead, we post the entire $50 to its intended fund and the cost of fundraising comes out of our organizational overhead. These credit card processing fees are the equivalent of postage and stationery in the digital transaction world. As Rebecca says, the cost of doing business.

We have only split the transaction one time: when a donor decided to give a $90,000 pledge via credit card in three installments, to a restricted campaign fund for which we were tracking a grant match. In this case, the amount she volunteered to pay above $90K was put to operations instead of to the match. Otherwise, we have not split the gift. If your donors are giving Unrestricted (operational) funds especially, it does not make sense to split the gift, as your fundraising costs most likely come out of operations anyhow.

If you do decide to keep it split by fund, I advise against Split Gifts. They make reporting much messier, with the potential to throw off revenue reports if not handled carefully by posterity. Assume that your successors will all be green starting off, and stay with the inconvenient but safer double gift entry - making sure that the donor gets a consolidated receipt for both parts.

Warren Sherliker

Just to note you have to be careful here - if the payment provider judges the fees based on the total amount paid you would need to charge a little bit more than $52 to get $50 after the fee is taken off.

We give away SmartDONORCOVEROLX which adds the feature to Online Express forms but I believe Blackbaud are looking to offer this for NXT donation forms soon…

Sandra Moore

Thank you so much Warren, Faith and Rebecca for the very helpful input.

Finance is who decided on using a separate campaign and fund. I would prefer that they just put it toward the donor's fund choice and pay through operating cost as they always did before, and still do with credit card gifts coming from other sources. That would make it all simple. I will tactfully encourage them back toward that by new year. It is that age old issue of Finance (logical money buckets for their side of the shop) versus Development (Donor friendly reports etc.)

Otherwise we probably will go with split gifts, despite their short comings, because one year of these gifts in manageable, but it is going to be a huge mess years from now for recurring gift donors.

JoAnn Strommen

@Sandra Moore, yes try to get to a position of crediting full amount as gifts. A number of us didn't key in a reply but indicated our agreement with Rebecca's post. Split gifts sure adds more work and requires extra attention when running queries/reports/exports. And can be confusing to donor if listed separately in receipting.

Best wishes.

Sandra Moore

Thank you, JoAnn. I appreciate the additional input. ?