Funraise, the nonprofit industry's leading digital fundraising platform, announced the elimination of donation-based platform transaction fees with their Donors Cover Fees model.
Online payments have costs—although often discounted for nonprofits, all companies that perform online transactions incur fees. Whether it's processing fees from a payment gateway or platform fees from a fundraising platform, online payment fees are necessary to maintain the security and performance of online payment infrastructures.
With online payments, nonprofits incur two fees.
- Processing Fee—The fee charged by the nonprofit's payment processor (or gateway) for each transaction. For example, Stripe and PayPal offer a nonprofit rate of 2.2% + 30¢ for the most common cards.
- Platform Transaction Fee—The fee charged by Funraise for online transactions.
Funraise aims to relieve the burden that nonprofits shoulder when they have to account for fees in their strategic planning. By handling these fees differently, Funraise is lightening the load for nonprofits and expanding the number of organizations that can afford the technology they need to change the world.
Justin Wheeler, Funraise CEO and Co-founder, says,
“As a company, we believe covering nonprofits' platform transaction fees is our risk to take on. We’re excited to implement the Donors Cover Fees model because it means more funds going to programs—not fees.”
While a donor covers fees strategy is not new to the nonprofit fundraising space, Funraise's model ensures that their nonprofit customers always receive the donor's full intended donation amount, whether or not the donor opted in to cover fees, meaning Funraise's customers receive more money per donation and can invest more into impact.