GiveMN, with its project “Give to the Max Day,” does a fabulous job of stirring up excitement each November for giving generously to causes that are dear to us. While it is unarguably a great thing to encourage people to contribute to nonprofits, the myriad options of how to send donations present the donor with a choice, whether they realize it or not, of how to support their favorite charities. While we are thankful of all the donations we receive, we believe that it is important to be mindful of how the mode of giving affects the overall benefit received by the nonprofit.
Let’s examine three different options for donations to the Minneapolis Pops Orchestra.
Option 1: Donor sends a donation check directly to our office (the most benefit):
With this option, the donor assumes the cost of a $0.47 stamp and the cost of an envelope. The Pops is able to deposit that money with minimal processing and no fees.
Total cost to donor ($100 donation): $100+$0.47+ ~$0.15 (for the envelope)=$100.62
Total benefit to Pops: $100
Option 2: Donor sends a donation through PayPal (substantial, but slightly less benefit):
With this option, the donor has the ability to easily make a donation with a credit card. Paypal deducts a per transaction fee of $0.30 plus a percentage (2.2%) of the transaction amount.
Total cost to donor ($100 donation): $100
Total benefit to Pops: $100-$2.20-$0.30=$97.50
Option 3: Donor sends a donation through GiveMN:
This option is similar to the PayPal option in that the donor can give easily online through the GiveMN.org website. The organization deducts 4.9% for credit card processing and 2.0% for the “GiveMN mission and programs.” However, the donor has the option to pay the fee on top of their donation, so that the Pops Orchestra receives the full amount. See below:
Without selecting option to cover fees:
Total cost to donor ($100 donation): $100
Total benefit to Pops: $100-6.9%=$93.10
With selecting option to cover fees:
Total cost to donor ($100 donation): $100+6.9%=$106.90
Total benefit to Pops: $100
With this information we hope that your support of your favorite nonprofits can be fully informed and you can make the best decision for you and the nonprofits you support!
