Donation Processing Fees, Uncovered
Are you getting the whole story when it comes to approaching charitable donation fee coverage?
The perceived pressure to process donations at zero cost to nonprofits feels like the right thing to do, but the truth is it’s unrealistic. The notion that there is a cost associated with charitable giving, is well known and widely accepted. How you manage that cost is what really matters. This is where misconception, misunderstanding and confusion seep into the narrative. You're not getting the whole story when it comes to approaching fee coverage in a way that aligns with your mission, your brand and your business. The secret is you don’t need to take an all or nothing approach. With the right tools you can develop a charitable support plan that is unique to your company and programs while still being cognizant of nonprofits needs and challenges.
Close the book on an all or nothing approach to charitable fee coverage.
We may not like it but, even in the business of doing good there are overhead costs. Supporting staff and volunteer management, office space, technology, maintenance, programming space, legal, accounting, fundraising, marketing, and donor relations adds up. Never mind the cost that it takes to receive and process each donation. In truth 15-20% of funds raised typically go to cover processing donations. Taking a strategic approach to donation fee coverage, including outsourcing the effort behind disbursing funds, gives you control, flexibility and the opportunity to create a transparent, mutually beneficial process for you and your nonprofit partners.
We understand that covering the cost associated with charitable donations is sensitive and presents unique challenges, which is why we have formulated these standard fee coverage methodologies. You can apply any or all of these methodologies to your programs in a way that aligns with your mission, your brand and your business.
What are your fee coverage options? Approaches to consider:
|Choice Coverage - Consider covering fees for some programs, for example the company match, but not the original donation. Alternatively, fees for partner nonprofits may be covered, where fees for employee chosen organizations are not. Whatever the mix, this method allows you to cover some or most of the fees, while encouraging donations aligned with your giving strategy.|
|Standard Coverage - In this model, the cost is shared across thousands of recipient organizations rather than your single entity paying. When outsourcing disbursements in this model, the nonprofits receiving the funds see increased efficiencies and reduced operational costs such as reduced burden of tax receipting.|
|Charitable Grant Coverage - When the cost is covered as a processing fee on the donation, the fee is considered a charitable donation - in effect a grant (processing grant). When outsourcing your disbursements to CyberGrants, the costs involved are not paid to us, but to the DAF as part of the processing workflow. Therefore, the processing fees are tax deductible.|
A Better Way of Giving. Globally.
Regardless of which fee coverage approach you decide to take, with CyberGrants, you are able to customize the way you manage the cost associated with your donations in an intentional way. In addition, with this simplified disbursements solution, outsourcing to CyberGrants ensures 90-97% of funds go to the cause, all the while making the process for nonprofits a lot more efficient and saving them money. Seamlessly disburse the maximum donation in the shortest amount of time at the lowest possible cost to the nonprofit. Enjoy those advantages and more with our comprehensive solution, coordinating all of your philanthropic activities.
Driven by our mission of providing innovative software and services in the most secure and efficient way we offer three types of disbursements to serve the needs of our diverse client community. The result, unmatched efficiency and acceleration, critical factors in making your philanthropic programs successful and more impactful.
Domestic US and Canada
(funds originate in US or Canada)
(funds originate in US or Canada)
Domestic Non-US or Canada
(funds originate in non-US/Canada country)
Fully outsourced to CyberGrants via CGDS
Outsourced to CyberGrants + CAFA
CG integrated with AP systems,
Universal Benefits of CyberGrants Disbursements Solution:
- Get all the perks with no implementation fee.
- Utilize any and all program types including, employee giving, grants or both.
- Eliminate the hassle for creating temporary vendors in your AP system.
- Remove the need for an accounts payable feed altogether.
- Enable ACH as well as one-time and recurring credit card giving.
- Eliminate additional fees for check printing and distribution.
- Reduce administrative burden as CG payments and vetting teams takes on key tasks in the payment process.
- Fund new or expand existing programs.
Where do nonprofits fit into this story?
Nonprofits are well aware of and tuned into the financial investment required to process donations, but that doesn’t mean there’s nothing we can do to help. This is the better way of giving. We did the hard thing and reached out to nonprofits asking for help to better understand how we can serve them. In talking with our nonprofit partners we heard about how inefficient the process of receiving donations truly is.
Essentially nonprofits are spending as much as 20% of donated funds under the traditional model, but dedicating valuable time and resources as well. This leaves only 80-85% of funds actually going towards the cause.
We took this information, garnered from countless conversations with our nonprofit partners and through our NPO Council meetings, and invested in creating a more efficient process to disburse funds. Our nonprofit portal, FrontDoor, in combination with the CyberGrants Disbursements Solution takes a holistic approach to meeting the needs of our clients, your employees and nonprofits.
The benefits address specific disbursements challenges raised by nonprofits...
- Consolidation of payments – Nonprofits traditionally prefer their payments aggregated, which
provides efficiency and lowers their banking costs, putting more money in their pockets overall.
- Reduced administration costs – Providing tax receipts to donors uses precious nonprofit time and
money — tasks that can be completely eliminated for eligible donations.
- Less time fundraising, more time impacting – By reducing the administration required to deposit
funds and provide tax receipts, organizations can spend more time living their mission and less time
worrying about how to do so.
- Economy of scale – This model reduces administration costs, coupled with overall scalability in
regards to the costs of running a corporate employee program. This ensures that NPOs are prepared
for your program’s growth and greater success.
- Visibility to gifting corporations and donors – Being able to see who is supporting them
is key to a nonprofit organization’s ability to gain the best possible view of how effectively they
Learn more about the CyberGrants Nonprofit Organization Council
Have you heard of the CyberGrants Nonprofit Organization Council (NPO Council)?
The initial NPO Council first met almost three years ago with the goal of helping CyberGrants achieve its mission of providing innovative software and services in the most secure and efficient way.
Since then, the CyberGrants product and services teams have been working diligently to incorporate the council’s feedback into improvements to the platform while redefining what it means to truly partner with nonprofits. NPO efficiency and acceleration are critical factors in making the corporate philanthropy programs of CyberGrants’ clients successful and more impactful. By reducing the effort and cost associated with processing the vast donations from various CSR programs, NPOs are able to retain more dollars to do more good.
Ready to rewrite your story of fee coverage and disbursements? Contact us to learn more about leveraging faster funds availability, accessing more dollars for your causes and making a bigger bottom-dollar impact.