Donors want as much of their donation to go to the cause as possible. They also understand that there are costs associated with work done - including the cost of human and technological resources that go into processing a donation, issuing tax receipts, allocating funds, etc.
What does “covering administration fee” on a donation mean?
Every online donation comes with some administrative overhead. For online donations, this is most commonly the processing fee. This feature offers the donor a choice to pay a little bit more to cover, at least in part, some of this expense, so that more of their donation can go to the cause and make a bigger impact.
Success with Cover Admin Fee
Whilst charities often hesitate to turn this feature on, as it might be perceived as slightly offensive to donors already making a generous donation, or it could risk deterring the donation altogether - most studies have shown that neither of these concerns appears to be a roadblock in donating. On the contrary, turning this feature on has shown to increase trust. Donors expect transparency and appreciate the knowledge of such costs upfront, thereby encouraging a deeper trust and commitment from supports. Plus they like being given the option to make that decision rather it having it been made for them.
How much should you ask?
Most nonprofits want to know the magic number to ask for, and if they should use a flat fee or a percentage amount. The range of adoption of this feature is anywhere from 20-70%, with an average being approximately 30%. This adoption varies greatly due to several factors, including the diversity of the non-profit sector; variances in donor demographics across the sector; and the type of campaign. What does affect the adoption, is the actual dollar amount or percentage in proportion to the donation amount.
For example, a low, flat fee of $2 may have a high adoption rate. However, if the average donation is quite high this would represent an overall lower percentage of revenue compared to a lower average donation. So, it is important to understand your donation volumes and the range and the average donation amounts and set this fee from there.
Deciding on this percentage or dollar amount ask unfortunately involves some testing to find what donors are comfortable with during launch, and close monitoring before testing further with a slight increase or decrease in ask.
How to give your Donors the option to Cover Admin Fee with raisin
It’s that easy!