Should donors cover processing fees? How to decide

Yes, offer it, and leave the box unchecked. Letting donors cover processing fees is a fair option to put on a donation page. Requiring it, preselecting it, or writing a guilt line next to it is where organizations get into trouble.

You usually notice the fee at reconciliation. A supporter tells you they gave $100, the deposit says $94.80, and now the development director is deciding whether the thank-you letter should say $100 or the number the bank actually sent. Multiply that gap across a year-end appeal and it is real money, which is why the checkbox exists.

Below is what the fee costs at four common gift sizes, the wording to put next to the checkbox, what campaigns and nonprofits each have to confirm first, and how to keep the covered fee straight in your records.

Key Takeaways
– Offer fee coverage as an unchecked option with one plain sentence beside it. Never preselect it, and never suggest a donor who declines gave less.
– At a rate of 4.9% plus 30 cents, a $100 gift nets $94.80. Across 100 gifts that size, that is $520 you either absorb or ask donors to add.
– Campaigns should confirm with the FEC or their state campaign finance office how a covered fee is counted and reported before the option goes live.
– Nonprofits should write the receipt against IRS substantiation guidance, because the fee a donor adds is additional money they gave you.
– Record the gross amount, the fee, and the net on every gift, so the report you file and the thank-you you send each use the right figure.

What it means when donors cover processing fees

Fee coverage is an option on your donation page that adds the card processing fee on top of the donor’s chosen gift, so the amount you receive matches the amount they picked.

Every online gift carries a fee. Someone pays it. Either it comes out of the gift before the money reaches you, or the donor adds it at checkout. There is no third option where the fee disappears, and pretending otherwise on the page is how you end up with a donor who is surprised by their card statement.

Fee Coverage on a FundHero donation page is a donor choice rather than a setting you impose. The donor sees the option, decides, and the page does the arithmetic.

What processing fees cost your campaign or nonprofit

Run the numbers before you decide anything. FundHero’s pricing page lists card processing at 4.9% plus 30 cents per donation, and the table below is that rate applied to four common gift sizes.

The 30 cent piece hits small gifts hardest, so a page full of $25 donations loses a larger share than a page full of $250 donations. The gap also grows with volume: the fee on a single $50 gift is a rounding error, and the fee on 400 of them is $1,100.

Rates differ by tool and by card type, so pull your last statement and check your own before you quote a percentage to a donor or a board member.

When to ask donors to cover processing fees, and when to skip it

Turn the option on for your standard online donation page, the one your email appeals and your social posts point at. That is where most gifts arrive, where donors expect a checkbox, and where the fee adds up fastest.

Name the tradeoff honestly. Fee coverage raises what you net per gift, and it adds one more decision to a form where every decision costs you a few completions. Keep it to one line and one checkbox, with no explanatory paragraph underneath, and the cost stays small.

Leave it off in a few places:

• A page built for one major donor you already spoke to. You negotiated the amount on the phone, so do not let a checkbox be the last thing they read.
• A page that already asks for something unusual, like a matching-gift form with employer fields. Ask for one extra thing at a time.
• Any page where you cannot word the option without pressure. If the only sentence you can write sounds like a scold, absorb the fee and move on.

Recurring gifts deserve their own sentence. A monthly donor who covers the fee covers it 12 times a year, so say so on the page rather than letting them find out in month three. Our post on building a monthly giving program that lasts covers the rest of the setup.

How to word the fee-coverage option

Write one sentence, put it next to an unchecked box, and stop. Copy one of these and swap in your own name:

Cover the processing fee so my full gift reaches the food bank.

I’ll cover the processing fee so the whole $100 goes to the campaign.

Cover the processing fee. My monthly gift will be $52.75 instead of $50.

Three rules keep the wording clean:

1. Say what the money does. “Cover the processing fee” tells the donor exactly what they are paying for. “Add a little extra” does not.
2. Show the number. A donor who can see that covering the fee turns $50 into $52.75 does not have to do math on a phone.
3. Leave the pressure out. Cut anything that reads like “most donors cover the fee” or “make sure 100% of your gift counts.” A donor who declines still gave you money.

Here is the test: read the sentence aloud and imagine a donor who is giving $25 on a tight budget. If it would make them feel cheap, rewrite it.

What campaigns and nonprofits have to confirm first

The paperwork behind the checkbox is not the same for both audiences, and this is the part to settle before the page goes live.

Campaigns

The fee a donor adds is money they gave you, which raises two questions your treasurer needs answered: whether the covered amount counts toward that contributor’s limit, and whether you report the gross figure or the net. Federal committees work from the FEC’s contribution limits and receipt rules. State and local races follow their own state’s rules, which you can find through your state election office.

Those answers differ by state, by office, and by election, and none of this is legal advice. Ask before the option is live, not after a donor lands a dollar over a limit because of a fee they volunteered to pay.

Nonprofits

Your receipt has to reflect what the donor actually gave, fee included. The IRS sets what a written acknowledgment must contain and when it is required, and its guidance on substantiating charitable contributions is the page to write your receipt copy against. Questions about what portion a donor may deduct belong with the IRS or their tax advisor, not with your donation page.

Decide now whether your acknowledgment shows the total charged, then make every receipt do it the same way.

Record the gross, the fee, and the net

A covered fee creates two numbers for one gift, and the reports fall apart when your records only keep one of them.

Keep all three on the donation record: what the donor chose, what the fee was, and what landed in the account. Automatic Donation Tracking adds the donor account and the donation record when the money comes in, so nobody is retyping totals into a spreadsheet on Monday, and the gift sits on the donor’s Contact History with the calls and emails.

Then pull the right number for the right job. The premade reports and exports give you a filing report and a spreadsheet you can check line by line. Your bank reconciliation wants the net. Your filing and your board report want whatever figure your rules call for. Your thank-you letter names the amount the donor chose to give, fee and all, because that is the number they remember.

FAQ

Is it rude to ask donors to cover processing fees?
No, as long as it is a choice and the box starts unchecked. Donors generally understand that card payments cost something, and a plain sentence explaining the option reads as transparency. It becomes rude when the box is preselected, when the copy implies a smaller gift is a failure, or when the donor cannot easily see what the option adds to their total.

Should the fee checkbox be checked by default?
No. Preselecting it charges people more than the number they clicked, which is the fastest way to earn a chargeback and lose a donor. Leave it unchecked, show the adjusted total before the donor submits, and let the decision be theirs.

Do donors who cover processing fees give smaller gifts?
Nobody can answer that from someone else’s numbers, so test it on your own page. Compare two comparable months, one with the option and one without, and look at both the average gift and the net you actually banked. Your donor base is the only sample that matters.

How much are credit card processing fees on donations?
Most donation tools charge a percentage of the gift plus a flat per-transaction amount. FundHero’s pricing page lists 4.9% plus 30 cents per donation. The flat piece is what makes small gifts expensive in percentage terms, so check your own rate against your actual mix of gift sizes rather than against a headline percentage.

Can monthly donors cover processing fees too?
Yes, and the page should say what that means before they commit. A monthly donor covering the fee pays it on every charge, so show the adjusted monthly figure rather than only the base amount. A donor who sees the real number up front is less likely to cancel after the second charge.

Does the fee a donor covers count as part of their contribution?
That depends on who you are and where you are. Campaigns should confirm with the FEC or their state campaign finance office how a covered fee is treated for limits and reporting. Nonprofits should follow IRS substantiation guidance for what the receipt says. Settle it before the option goes live.

Decide this week, in four steps

Whether donors cover processing fees is a decision you can make in an afternoon. Pull your last processing statement and calculate what fees cost you over the past 90 days. Write the one sentence you would put next to the checkbox, and read it aloud to someone who gives you $25 a year. Ask the FEC, your state campaign finance office, or the IRS guidance whichever question applies to you. Then turn the option on, unchecked, and compare what you net on the next appeal against the last one.

Most organizations land in the same place: offer the choice, keep the wording plain, absorb the fee without complaint when a donor declines, and record all three numbers on every gift so the reports stay honest.

If you want to see how the fee option, the donation record behind it, and the reports fit together, start a free FundHero trial. No payment information is required, and you can build a real donation page with your own wording before you commit to anything.