Transaction Fees: Why it’s totally fine to ask givers to cover them

When it comes to online giving and text giving in the church, the biggest deterrent is cost. Why should the church have to pay transaction fees? Doesn’t it seem like nickel-and-diming our congregants to ask them to cover the fee? Is it worth it?

In terms of worth, having an online giving option is vital for the continued life of your church. 53 percent of people prefer to give online, and 3 out of 5 people over the age of 65 do all of their banking online. Soon, online won’t even be enough because that majority will shift to smartphone users. Times, they are a changin’.  

Back to transaction fees. These are “the cost of participating in a market.” Transaction fees are everywhere – and I mean everywhere. When the movie tickets bought online cost a little more because of a “service charge,” that’s the transaction cost the customer is paying. When purchasing jeans that are worth $10 but are being sold to you for $29.99 from a large corporation, that’s because there are transaction fees added onto the price of the product. Even checks have a price! More often than not, the customer is covering the cost of his or her own purchase.

Then there are nonprofits and churches. Completely donation based organizations, nonprofits and churches are often without the ability of sneaking processing costs into a product and are left paying these fees. This means that when you as a giver donate $100 with a credit card, the organization receiving your donation ultimately pays about $1.50-5.00 per donation they receive. If someone donates $2,000, the church is looking at paying $70-80 dollars for one gift! In today’s market, where 53 percent of the donation base prefers giving with credit or debit cards, suddenly the organization is losing a huge chunk of your donation to allow these gifts to be given.

However, when the giver donates the cost of his or her own transaction, that donation is received “at cost.” Basically, ALL the money you are giving to do your church’s good work goes to that work, and all the givers will take a small chunk out of the church’s or non-profit’s basic business expenses, allowing them to use the entire intended gift toward their mission.

At FaithStreet, we allow givers the option of donating the cost of their own transactions as well as having them cover these costs automatically. We do this because we believe that nonprofits and churches shouldn’t have to pay the price of participating in the business market when there is so much more they could use their money for. FaithStreet givers agree with us; 70% of them, when given the option, choose to cover the cost of their own transaction! In the big picture, it’s best to share and spread this expense by paying a small flat rate fee for the software and assistance, rather than paying for each gift the organization receives.