When deciding on an online giving platform for your church or non-profit, you need to to do your due diligence. Do the math and look at the actual cost to your organization. In this continuation of our ”Choosing The Best Online Giving” blog series, we’re going to get a more in-depth look at rate structures.
A LITTLE BACKGROUND…
Most processing companies will provide you with a flat pricing model. For instance, GivingFire’s rates are 2.5% across credit card (CC) and automatic clearing house (ACH, or online checking) with a $50 a month fee. What goes into these fees, how are they determined, and how do other companies determine their fee structures?
All CC and ACH companies charge fees, and those fees are different depending on how the transaction is processed. Walking into your grocery store and swiping your card will produce one set of fees, while giving your tithe online will produce another set of fees. It all has to do with how much risk is involved with each type of transaction. For the most part, online transactions are considered higher risk than transactions handled in person. It’s far easier to use a stolen card online, so all online transactions (even giving!) will have higher fees attached.
NOW, WHERE DO THE FEES COME FROM?
Here’s a breakdown of the fees for any online giving you might be looking at. Every company that processes credit cards has to pay these fees somehow, so it’s good for you to know that they exist:
Account or Monthly Fees: The CC companies (i.e., VISA, MasterCard, AMEX, etc.) charge a certain amount each month just to have an account open with them. Altogether, these fees typically add up to about $20. In addition, they charge $5-$15 per month based on how much volume you do that month.
Transaction Fees: Once you have an account, you are going to be charged every time you process a payment. Every time a card is “swiped,” CC companies get a cut. On average (and depending on the type of transaction) the charge is somewhere between 2.0% and 2.9% with a $0.17 fee per transaction, with smaller organizations paying a higher rate. This money does not go to GivingFire or the giving platform you choose – it’s simply the cost of using credit cards.
GivingFire absorbs the $0.17 and charges a flat 2.5% on all transactions. Our pricing is a strategic decision we made from the get-go to be as simple as possible, and to have the lowest margins as possible. We lose money per-transaction on some of our smaller accounts, but we break even since we don’t spend the full $30/mo on server costs. It works the other way too – for larger organizations we lose money on the monthly rate, but get it back on the transaction rate. That’s how we can offer the same rate to everyone, and you never get charged more than the rate you sign up for, even if the transaction costs more to process.
Most online giving platforms make money by increasing the rate per transaction. Companies lower monthly fees so that the prices look better, but if you do the math, you end up paying more. Increasing the rate per transaction by just one percent or $0.50 can add hundreds to what you pay in fees. Beware.
“Hidden” Fees: Now come all the other fees to surprise you. In addition to the account fees and the transaction fees there are batch fees, authorization fees, statement fees, PCI compliance fees, annual fees, maintenance fees, NABU fees, FANF fees -- the list goes on and on. Whether these fees are actually hidden or up-front, these are the “gotcha” fees that everyone hates. These are often required by the CC companies – in GivingFire’s case, we pay these directly and don’t pass them on to you, but again, someone has to pay them. There are a ton of these, and often add an extra $10-20 per month to your account. We’ll go over them in-depth in a future blog post.
Software, server, security, upgrade, and tech support costs are also usually incorporated into the monthly as well, and this amounts to $10-40 per client per month, largely depending on the size of your organization.
As you look at online giving platforms, make sure you are approaching the decision in an informed manner so you know what to look for. At GivingFire, we are dedicated to serving churches and non-profits and we believe that we have the best product on the market for doing so with the most transparent rates. In our next blog, we will take a look at a real-life example, comparing GivingFire’s fees to that of a competitor and doing the math to see which is cheaper.
New to GivingFire? We're passionate about solid donation management for churches and non-profits, and we're trying to bring honesty and transparency to a murky industry. If you need help figuring out donations, we'd love to talk. Contact us HERE or take a look at our main site at givingfire.com.