Digital fundraising is now a necessity for nonprofits. Critically, it allows greater visibility and access to a large number of donors, many of them more comfortable with online transactions than cash or checks. However, the financial structures underpinning digital fundraising platforms are often opaque, hiding a briar of fee structures that can cut deeply into an organization's budget.

Donors know this, of course. They frequently ask questions like “Does GoFundMe take a cut?” Unfortunately, the answer isn’t as straightforward as it could be since a “free fundraising platform” still usually includes third-party transaction fees of about 2.2% to 2.9% per payment. Similarly, nonprofit organizations themselves struggle to navigate these hard-to-avoid payment processing costs, such as nonprofit PayPal fees or Stripe fees, even when they’re discounted for verified 501(c)(3) entities. 

It boils down to this: When a nonprofit chooses a fundraising platform partner, whether it's an enterprise solution or a smaller, versatile service, it enters into a multi-layered financial arrangement. To truly understand where the money goes, it’s best to look beyond the marketing promises and analyze three primary categories of fees: 

• platform and subscription fees
• payment processing fees
• hidden costs.

Platform & subscription fees: the visible layer

Nonprofit fundraising platform fees are like the rent a technology company charges for use of its software. Historically, this has been the most common way to monetize a product or service.

Subscription-based models

The largest and most comprehensive fundraising platforms – catch-all collections of interconnected brands like GoFundMe Pro, Blackbaud or Bonterra – deliver enterprise-grade solutions. They typically operate on a Monthly or Annual Recurring Revenue (MRR/ARR) model. These consist of flat fees regardless of how much a nonprofit raises.

The clearest benefit is cost predictability, especially for high-volume nonprofits. However, it becomes more of a burden to smaller organizations that might struggle to justify a monthly subscription (often in the hundreds of dollars) if donation volume doesn’t regularly go well beyond the break-even point.

Percentage-based platform fees

Other providers, like Donately and Qgiv, favor a percentage of intake. This "success fee” (around 2% to 5%) is levied on every dollar raised. 

This may indeed lower the barriers to entry for smaller nonprofits, but it adds a ceiling on success: the more effective a nonprofit's fundraising, the more the fundraising platform taxes growth.

Zero-fee & tipping models: the transparent alternative 

A significant shift over the last decade has been the rise of "zero-fee” fundraising platforms. Providers like Give Lively, Zeffy, Givebutter, Every.org and BetterWorld have pioneered a mix of models that place no (or limited) tech overhead pressure on nonprofit budgets. In more recent years, these companies have incorporated optional donor tips to help keep their platforms free.

This model is likely the most cost-effective for small- to mid-sized nonprofits, although it certainly benefits large organizations too. Access to quality tools such as customizable fundraising pages, event pages and peer-to-peer pages is assured without any invoicing.

What does "free tech" mean?

There is a lot of justifiable skepticism when it comes to “free” stuff. For the most part, the "free" label eliminates the earlier-mentioned “rental” cost for the use of a company’s software without any compromise to the quality of the software. It means that there is some level of free access to that software – no platform, subscription or percentage fees. 

However, free use may just be what’s available at the lowest tier and it may be one that limits access to data, customization or donor management tools. What exactly free access includes and whether or not there are other fees are questions explored further below.

Added platform tips

“Free” nonprofit fundraising platforms now often ask donors for a voluntary tip at checkout. While not necessarily explicitly set up to shift financial responsibility from an organization’s mission budget to donors’ individual choice, this is, in effect, what it does. 

For some platforms, tips are critical revenue, imperative for the survival of the platform; for others, it is in addition to core financing from venture capital, philanthropic benefactors and other sources. 

Hybrid freemium models

A new breed of “free” fundraising platforms has more complex structures, referred to as a freemium model – a strategy that promotes basic services for no cost, but charges a premium for advanced features, increased capacity or support.

This free level may be a welcome boon to smaller nonprofits, but any growth that demands an expanded toolkit can trigger real cost anxiety. Of note, some platforms require the inclusion of a tip prompt at the “free” level, allowing for its removal at more comprehensive levels where a platform percentage fee is charged.  

Payment processing fees: mostly unavoidable 

Even when a platform waives its fees, there is one cost that almost always remains: payment processing fees, also known as transaction fees. These are small third-party charges paid to Stripe, PayPal, Shift4, Chariot and other companies that manage the secure financial transfer of funds across the internet.

Standard rates

The industry standard for nonprofit processing is approximately 2.2% + $0.30 per transaction for most major credit cards (excluding American Express), although lower rates are available depending on the payment processor and payment method.

Hidden markups

Under the guise of simplicity, some platforms bundle these fees into a single higher "transaction fee." If the actual processing cost is 2.2%, then when a platform charges 5%, it is quietly pocketing a 2.8% markup on every gift.

Donor coverage of fees 

Common to most nonprofit fundraising platforms is a way for donors to cover payment processing fees, sparing the nonprofit this cost. For platforms that charge no platform fees, this opt-in, when selected, may effectively make a donation transaction entirely cost-free for nonprofits.

The “hidden" costs: beyond the percentage

The hidden costs of proprietary technology can balloon the actual cost of a donation, even when platforms advertise low or zero fees. These stealth expenses rarely appear on homepage pricing tables.

Salesforce integration & data tax

"Free" platforms can sometimes lose their shine and for-profit platforms reveal additional cost layers to organizations using Salesforce as their CRM.

Integration fees

Some mid-market platforms charge a premium "app connector" fee just to sync data with Salesforce. This can range from double to triple digits, on top of other costs. Similar fees may apply to other integrations as well, including non-native integrations that incur costs through a data management intermediary like Zapier.

API & data storage fees

Because Salesforce may charge for API calls or additional data storage once certain limits are exceeded, a fundraising platform that syncs every donor interaction can inadvertently trigger overage bills from Salesforce. Platforms that don't offer efficient, streamlined data mapping can amount to a CRM “tax.”

Data extortion & export fees

Some legacy platforms charge for data exports, making it expensive to shift away from them. When attempting to switch providers, nonprofits may find that getting their own donor history into a usable format requires a one-time "data release fee" or a professional services fee that can run to thousands of dollars.

“Gross-up" calculations

The math can sometimes be a little deceptive when donors have the ability to cover payment processing fees. To ensure a nonprofit receives exactly $100 after a transaction fee, a platform may charge a few cents more. Over thousands of donations, these small discrepancies can lead to unexpected shortfalls.

Prioritizing the mission

Choosing a nonprofit fundraising platform and decoding its fees are exercises in stewardship. While enterprise tools offer very robust features, they often hide a tangle of subscription, data and integration costs, especially when Salesforce and/or other third-party tools are part of the ecosystem. 

For nonprofits with more limited budgets, "zero-fee” platforms, whether or not they rely on donor tips, it is wise to ensure that the maximum amount of every dollar stays with the nonprofit. Being able to tell donors that no part of their gift (especially when the donor covers the processing fee) is used to pay the hidden costs of giving is a powerful transparency that builds long-lasting trust.

‍To learn more about Give Lively and see how it compares to other nonprofit fundraising platforms, visit our Pricing page.