(Note: this article applies to charitable donations via Evite and other other discrete donation forms, and NOT to our Give & Grow product for Shopify merchants. For Give & Grow, please go to that section of this help site.)
There may be deductions from the gross donation amount, depending on where the donation was made and the form of payment:
1) card processing costs
For donations made via credit or debit card, a 2.9% + $.30 per transaction fee covers the card processing costs charged to us. Donations made through an employer's engagement program generally do not incur these costs, unless you are adding a personal donation using your credit card.
2) our compensation: tip or technology fee
Tip. Some of our donation forms provide for a voluntary and adjustable tip, which helps us operate the service. We display the tip to you before you OK the charge. It is different from the technology fee described below since it does not change the amount reaching the charitable organization – the tip is in addition to the donation amount. Because these tips flow immediately to a for-profit service provider, under IRS rules they are not tax deductible to you, the donor; are not reported as part of the donation on the emailed tax receipt; and we do not report them as donations on our tax filings.
Technology fee. In cases where there is no optional tip on the donation form, there is a 3% technology fee that Pledgeling Foundation pays to its service providers – this pays for payment processing and disbursement, including staff, infrastructure, customer support, office space, and more. This is deducted from the gross donation amount before it is paid to the charitable organization. It works as follows:
a) When the donation is made from a third party partner's site:
- you may have the option to "cover our costs," which increases the amount of the credit / debit card charge enough to pay the card processing and technology fees; or
- the partner site may pay the technology fee.
b) When the donation is made from a nonprofit's site or platform, for instance via a "widget" or our text-to-donate service, the nonprofit agrees to pay the 3% technology fee.
3) international donation processing cost
For payments to charities outside the US that are not IRS-registered 501c3 organizations, we use partners to verify that the charity is equivalent to a US 501c3 and to aggregate and process payements to the charity. The larger of 5% or $50 is taken out of each payment (which can be made up of many individual donations) to compensate these partners.