As fundraisers we dream about the new frontier of online giving as a potential golden ticket for reaching younger or more tech savvy donors. Driving everyone to give online, in monthly installments, is all the rage. But what happens when a donor wants to give $1000 or more? Is there potential negative organizational impact in accepting large gifts online?
Negatives to Large Online Gifts
There are fees associated with online giving that can add up quickly if you are not paying attention. Paypal has the smallest fee in the field, coming in at 2.4% of each donation, and the percentage cut taken by online giving tools can go up from there to as high as 7.5% (or more). These fees may seem small when donations are a few hundred dollars or less, but when we start looking at donations in the $500 to $1000 range the bite that fees take out of a donation can become substantial. So at what threshold do you start considering counseling people away from online giving and towards check, stock or cash donations?
Consider what your average small gift donation amount would be- that could be $25, $35, $50- and use that number to determine the maximum amount that you are happy to pay in fees per donation. A good rule of thumb would be to aim for a payout to the online donation company that is equivalent or less than your average small donation. So if your average small gift is $25 and you are paying a 2.5% fee per donation, you might consider setting your maximum online gift threshold at $1000 ($1000 x 2.5% = $25).
There are certainly additional factors that can have a potential negative effect on your organization when accepting large online gifts. The timeframe in which the money actually becomes available to you is an important thing to consider. Many organizations set up accounts in which donations are delivered via a short term direct deposit, in which case the transfer time probably is not critical, however organizations who use online donation tools that pay in a monthly or a twice monthly lump check will see substantial delay in receiving large funds when an online major gift is made.
Strategies to Counseling Away From Large Online Gifts
It's tricky to direct donors to give via a specific avenue when it comes to major gifts, but there are some techniques that you can implore to help direct your large dollar donors away from online giving. The first to consider is your online giving menu. These are the dollar amount suggestions that you offer to potential donors via the online donation tool. You can suggest that larger donations are not made online by a setting the dollar amount progression to max out at your maximum online gift threshold.
Additionally, acknowledging to online donors that there is an opportunity to give off-line might provide enough of a hint for major donors to deliver their donation through a different avenue. Straight up asking that gifts larger than a certain threshold not be given online, with added explanation as to why that request is being made, feels like a somewhat risky endeavor and the etiquette around that is a little unclear.
There is also the potential to direct large dollar donors to give under a different online tool than your standard giving channel. Google Checkout is an interesting option in this area, as Google Grant recipients get access to this payment technique without any fees. The user experience is not ideal as it may be a little wonky, but for a donor who is determined to give a large amount through an online channel it may be a nice compromise tool to allow you to retain the entire value of the gift. Be cautious when going this route though, you don't want this process to seem overly complicated or to come off ungrateful. Save this strategy for people whom you can be sure will understand the situation.
Overall, remember, you don't want to scare away your donors due to an obsession with saving the fee, but a gentle nudge in the direction you want to move them can certainly help.