Technology certainly simplifies a lot of processes, especially when it comes to money. Everything from depositing checks to paying at the grocery store has become easier because of technology. When it comes to integrating mobile giving apps or platforms for your nonprofit, it’s easy to be swayed by promises of simplification and more donations.
Great marketing is one thing, but the numbers need to add up. Transaction fees and other costly “tack-on” fees could actually cost you money rather than bolster an initiative. Here are some fees and stipulations to watch for when selecting the mobile solution for your nonprofit.
Minimum Donation
The value of integrating a mobile platform into your fundraising is that it capitalizes on the moment of impact. If the platform requires a minimum donation, you’re missing the opportunity to attract new donors who may not feel invested enough to donate the required amount. Every little bit counts. Numbers from January 2008 show that then-candidate Barack Obama raised $28 million dollars, with 90 percent coming from people who donated $100 or less and 40 percent coming from those who gave $25 or less. Consider your current donor base as well as new groups you intend to target (e.g., millennials). Requiring a minimum donation may hurt more than it helps.
Set-Up Fees
What is the cost associated with simply signing up on the platform? Many vendors require a set-up fee to process any paperwork and get your nonprofit featured on the app or platform. When calculating the set-up costs, don’t forget to include time and resources on your side that are needed to get the initiative going.
Credit Card Processing Fee
Credit card companies charge fees to merchants for the convenience of using their payment methods. They do the same to nonprofits. With any mobile app, ask what the app company is being charged in credit card processing fees and then how much they’re adding on to that fee by the credit card processor (who processes the transaction) and bank merchant (who collects the funds).
Transaction Fees
Some app platforms may charge an additional percentage on every transaction. This fee often helps to underwrite their administrative costs. Still, as a nonprofit you need to make sure that you know how much of every donation is going back to your organization.
Subscription Fees
We call these the” pay-to-play” fees. Mobile apps and other mobile giving platforms need to cover their costs so they often will charge the nonprofit organization a subscription to be featured on their platform. Good or bad, you need to understand what the cost is and what you will receive in return.
We’re not saying that these fees aren’t justified. It’s simply that when you’re running a nonprofit organization, every dollar matters. Make sure you have a clear understanding of the investment required by your organization to maximize the platform fully. If using the platform drives more donors, it’s likely worth the money. If not, your budget dollars may be better spent with a different vendor.
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