While it would be ideal for nonprofit organizations to process donations at zero cost, there is a widely known and accepted cost associated with charitable giving: donation processing fees. How you manage this cost is really what matters.
The secret is that your nonprofit doesn’t need to take an all-or-nothing approach when it comes to managing your donation processing fees. Rather, you can process donations in a way that aligns with your purpose, brand, and operations. With the right tools, you can develop a plan that is unique to your nonprofit and its programs, while still being cognizant of your needs and challenges.
The cost of donation processing fees
Even in the nonprofit industry, there are overhead costs. Paying for staff and volunteer management, office space, technology, maintenance, programming space, legal, accounting, fundraising, marketing, and donor relations all add up.
Donation processing fees are part of these overhead costs. However, if you take a strategic approach to donation fee coverage, including outsourcing payment processing, you will gain the control, flexibility, and opportunity needed to create a transparent, mutually beneficial process for your nonprofit and your donors.
Some of the coverage approaches your nonprofit can choose are:
- Choice coverage. In this approach, you’ll cover fees for some programs, such as the company match, but not the original donation. This method allows you to cover some or most of the fees while encouraging donations aligned with your giving strategy.
- Standard coverage. For this model, the processing fees are shared across thousands of recipient organizations rather than your organization. When outsourcing disbursements in this model, the nonprofits receiving funds see increased efficiency and reduced operational costs such as reduced burden of tax receipting.
- Charitable grant coverage. When using this form of coverage, the cost is covered as a processing fee on the donation, and the fee is considered a charitable donation—a grant. For example, if you outsource your disbursements to Bonterra Corporate Social Responsibility Disbursement solution, the costs involved are paid to a donor advised fund as part of the processing workflow. Therefore, the processing fees are tax deductible.
Covering the cost associated with charitable donations presents unique challenges. You can apply any or all of these approaches to your programs in a way that aligns with your nonprofit’s unique needs. Mix and match them for a customized approach that suits your nonprofit’s unique needs.
Outsourcing fund disbursement: How Bonterra can help
Regardless of which fee coverage approach you decide to take, using donation processing software can help you manage the cost associated with your donations in an intentional way. You’ll be able to seamlessly disburse the maximum donation in the shortest amount of time at the lowest possible cost.
That’s where Bonterra’s Disbursement solution comes in. With the goal of providing innovative software and services in the most secure and efficient way, it offers three types of disbursements to serve the needs of nonprofit customers. Furthermore, it offers the following benefits:
- No implementation fee.
- Utilizes any and all program types, including employee giving, grants, or both.
- Eliminates the hassle of creating temporary vendors in your accounts payable system.
- Remove the need for an accounts payable feed altogether.
- Enables different giving methods for donors, like ACH and recurring credit card gifts.
- Eliminates additional fees for check printing and distribution.
- Reduces administrative burden as Bonterra Disbursement teams take on key tasks in the payment process.
- Funds new or expands existing programs.
These benefits address many nonprofit concerns, including:
- Consolidation of payments. Nonprofits traditionally prefer aggregated payments, which are more efficient and lower banking costs.
- Reduced administration costs. With Bonterra Disbursement, you can automate tasks such as providing tax receipts to donors, reducing time spent on administrative work.
- Less time fundraising, more time impacting. By reducing the administration required to deposit funds and provide tax receipts, organizations can spend more time working towards their purpose.
- Economy of scale. Bonterra Disbursement creates overall scalability in regard to the costs of running a corporate employee program. This ensures that your nonprofit is prepared for your program’s growth and greater success.
- Visibility into gift-givers. 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 attract supporters.
Bonterra Disbursement focuses on the inefficiencies in the donation process and eliminates them to create a streamlined process for your nonprofit. This software solution strives to meet the needs of its customers by creating customized processes for each one of them.
Making the most of donation processing fees
While donation processing fees can pose a challenge for nonprofits, outsourcing the process can benefit your nonprofit. By using disbursement software, you’ll be able to efficiently process donations and minimize associated fees.
Bonterra Disbursement can help your nonprofit make its desired impact. With this Corporate Social Responsibility software, you can learn more about leveraging faster funds availability, accessing more dollars for your causes, and making a bigger bottom-dollar impact. You can even request a free demo to make sure that the software aligns with your nonprofit’s needs.
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