With the click of a button, supporters from around the world can contribute to your nonprofit’s mission. This great advantage has really helped nonprofits, leading many of them to start raising more funds online. However, beneath the convenience of online fundraising lies a critical consideration: the true cost of payments processing.
We’ll explore the hidden costs and empower you to make informed decisions when choosing a payments vendor to ensure the hard earned funds you raise go to furthering your cause and don’t get swept away with confusing fees.
The illusion of a low processing rate
At a quick glance, some payment vendors might seem to provide remarkably low credit card rates, which could seem like the best choice. But sometimes the cost is just paid by the nonprofit in other fees. Many payment processors tack on hidden charges that can significantly erode the final donation amount received by your nonprofit.
These costs might include:
Amex rate: While some credit card fees are often advertised prominently, nonprofits should be aware of any additional processing fees that might be assessed based on the type of payment, such as the type of credit card transactions.
Payment-type rates: Vendors may charge higher than the average 1% rate for payment methods such as bank transfers (ACH) and more for digital wallet methods such as ApplePay or GooglePay.
Monthly fees: Some vendors charge monthly subscription or service fees, which can accumulate over time and negatively impact the nonprofit’s bottom line.
Chargebacks and refunds: Vendors might impose charges for chargebacks and refunds, impacting the nonprofit even when a donation is reversed due to unforeseen circumstances.
The key to avoiding the pitfalls of hidden fees lies in asking the right questions and knowing how to examine your payments vendor.
When was the last time you looked at your current payment processor’s monthly bill? If it’s been a while, we recommend taking 30-minutes to review so you understand all the fees you’re being charged.
Turning awareness into action: Navigating the fundraising payment landscape
The journey to effective fundraising payment management begins with awareness, but it’s action that drives results. By approaching payments vendors with a critical eye, nonprofits can take control of their finances and ensure that their fundraising efforts have the maximum positive impact on their cause.
As nonprofits continue to make a difference in the world, the path to success is paved with careful consideration, informed decisions, and strategic partnerships. By taking the time to understand the true cost of fundraising payments, organizations can channel more resources into their missions and make a lasting difference in the lives of those they serve.
At Bloomerang, we believe in transparency. That’s why we offer a free consultation to help your nonprofit understand its payment processing costs compared to Bloomerang Payments.
Katie Gaston is a Senior Product Marketing Manager with Bloomerang. She joined the Bloomerang Team after more than 13 years supporting the growth of various software organizations. Katie lives in Boise, Idaho with her two cats and two dogs household. She is passionate about giving back and currently serves as a Warhawk Wing Girl for an organization celebrating veterans. (edited)