Handling Payment Processing Fees - What are my options?

Ultimately, organizations want to be able to ensure that their participant are fully funded - fees can complicate this. There are a couple approaches to handle the payment processing fees that Stripe and PushPay impose. Let's unpack these different approaches and help determine which is the best for you!

Approach One: Absorb the fees as an organization

This is a setting in Preferences that you can select for your Organization. What this does, is allow the organization to absorb the fees that is imposed on each donation through the payment processor. In doing this, the participant will see the full donation amount in their account (Example: If they receive a donation for $100, they will see $100 in their fundraising account and the Organization will incur the fees from the donation). We find that this is the most convenient option for participants to achieve their fundraising goals.

Approach Two: Pass the processing fees to the participant 

With this approach, Organizations would not select the above option, but rather allow the processing fees to be taken out of the participant's donation they receive. PushPay processing fees are negotiated on a organization by organization basis with PushPay. Stripe's processing fee is a set amount (if you haven't checked into the nonprofit rate with Stripe, please do so to receive a discount).

The way donations will appear with this option is that there will be a Gross amount and a Net amount (the amount, minus the fees). The participant will see the Net amount in their fundraising account.

Here is an explanation of how it works: 

Stripe charges 2.9% + $.30 per transaction. If a donor chooses to donate $100, the participant will only be credited $96.80 (although the donor donated $100; 100x.029= 2.9+.3=3.2, 100-3.2= $96.8).

There are a couple ways that we see organizations handling the fundraising amount (to offset the fees). 

One way is to adjust the cost of the Opportunity - Example: If your Opportunity cost is $100, change the cost to $105 to ensure that the 2.9% + .30 per transaction is balanced out. 

Another way is to add a Payment Task that requires over 100% of the Opportunity funds to be paid at a certain time.

You can go up to 105% to help cover the fees that have been taken from the participants fundraising total.