Busting myths about donating online, part three

How To | November 7, 2011

When people first realize there are minor fees tied to making a donation online with their credit cards, they balk. With the feeling both they and the charity are losing out, the chequebooks come back out.  We’ll compare the two options, and take the often-forgotten hidden costs into consideration as well.

Myth: Donating online costs more.
The cost of donating online is the service charge for your credit card (usually around 2.9%) and then whatever fee may be added on by the site you’re using. Chimp’s fee is less than 1%. This isn’t an additional cost, but rather a deduction. If you donate $100, your tax receipt is for $100. When you send money from your Chimp Fund to the charity of your choice, Chimp deducts its fee.

With cheques, there’s the price of the cheque, and add to it the cost of the envelope and the stamp as well. Those are your costs. Not a lot for a single cheque, but it can add up if you write several over a year.

But you have to also consider the costs to the charity – all the costs. They need to pay for the administration time it takes to receive the cheque, process it, enter your personal details into their database, write a receipt, mail the receipt, etc.

Sure, maybe they don’t pay for the labour; a volunteer may do the work. But for every hour they’re working on processing payments, they’re not working on the charity’s actual programs. This time can add up if there’s a high volume of cheques.

Let’s not forget the most expensive element of running a charity: fundraising costs. Once your name is logged in a charity’s database, they will spend money trying to get you to give again. The charity world calls this “fundraising.” The for-profit world calls this “sales.”

When you give through Chimp, you can choose to give anonymously. This means you can spare yourself from unwanted mail and save the charity the expense of soliciting future donations from you.

If there are any other reasons that keep you from donating online, we’d like to hear them. And we’ll do our best to bust’em.

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