Should Nonprofits Give Donors the Option to Cover Transaction Fees?

Asking donors to cover the transaction fees on their online gifts has become commonplace on giving forms these days.

It’s not hard to see why. 

While these fees might seem small at the transactional level, over the course of a year they can eat a considerable portion of your nonprofit’s revenue. 

Looking at it from the financial side, asking donors to give 3% more to cover the transaction fees sounds like a no-brainer.

But how can you remain impact-centric if you’re asking the donor for more money than what they’ve already decided to donate?

Can that discourage donors from giving?

Deciding whether you should turn on this tempting feature can be difficult. 

In this post, we’ll help clarify the issue so you can make the right decision for your nonprofit.

Does asking donors to cover transaction fees reduce donations?

At first, you’d think it would.

But in this study with over 500,000 user sessions and 480,000 separate donors, Fundraise Up found that “there is no evidence that the option to cover transaction costs dissuades future donations.”

Among their user base, Classy found that if the covering transaction fee option is available, donors choose to use it about half of the time. 

If the option is automatically on by default, donors use it 75 to 85% of the time.  

As far as I can tell, there isn’t any evidence that asking donors to cover transaction fees will lower conversion rates.

In fact, giving donors the option to cover transaction fees is a great way of increasing transparency.

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Many donors don’t realize that their donations are not fully going to the cause.

They simply don’t think about all of the mechanics behind their donation and the cost of it all. 

By asking donors to cover the transaction fee, you’re both informing the donor that a part of their gift will go to a financial company and asking them if they want help offset that.

Looking at it this way means that giving donors the option to cover transaction fees is in fact a very impact-centric thing to do.

So how can you ask donors to cover the fees without sounding like you’re passing the buck? 🙂

Write good copy.

Once again, clarity makes all the difference.

Normally, vague language like “Cover Transaction Fee” will not perform well. 

That cryptic statement doesn’t tell the donor what those fees are—and they certainly won’t know what they get out of it if they choose to cover the fees.

Your copy can tell them these vital things quickly and help reduce friction.

I like the copy American Cancer Society used to express the value proposition in covering the transaction fees.

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The language around the checkbox is clear, written in everyday language, tells the donor what is being covered, and what’s in it for them.

The donor gets the satisfaction that their “entire contribution” is made.  

Notice how this copy centers the request around the donation rather than the transaction.  

This sentence frames the request to cover transaction fees in a way that empowers the donor to protect their precious investment in the lives of cancer patients.

Here’s an example from St. Jude’s.  

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From the beginning, the copy makes it impact-centric with a value proposition from the donor’s point of view, “I would like to offset…” 

Making the copy about increasing the donor’s impact and making their money stretch farther highlights the importance of their contribution and keeps the landing page focused on the donor’s impact rather than on the nonprofit’s finances.

Putting the decision in these terms keeps it all about the donor’s intention for the gift.

When you give something, you intend for it all to be used for the reason you sent it.

When you communicate with clarity, you help the donor make an informed decision with confidence. 

As always, test the results.

No matter how good or bad you think my advice is, I always recommend testing every change that you make to your landing pages to reveal what your donors want or don’t want.  

Continue to learn about your donor’s preferences because no one else has the same donors that you do. 

There may be a slight difference in how your donors react as compared with others.

Running split testing on your giving pages can be very helpful to see if your donor responds well to the option to cover transaction fees or not.

Also, test out different ways to write the button copy and see what kind of language resonates with your donors.

If you need any help getting the most out of your online fundraising. Contact us today!

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