Online giving has become crucial for churches to secure their financial future.
But how do you choose the right church giving platform? How do online giving fees work? And how can we save our church money with these fees?
This post covers all of that and much more! Arm yourself with knowledge as you choose the best online giving platform for your congregation!
Every online giving platform has partnered with a merchant processor. The processor coordinates with the credit card companies and banks, the online giving platform acts as a middle-man to between your organization and the processor. That way, your church or ministry doesn't have to stress about knowing all the regulations and maintaining compliance with the law. Those companies handle that for you and you can just take in mobile donations!
But both the processor and the platform have to make money somehow. Here's a breakdown of the kinds of fees processors and platforms charge:
Processing fees, sometimes called transaction fees, are fees that the processor charges to use their platform.
Most merchant processors do not charge a subscription fee or signup fee. The way they generate revenue is to "skim off the top" of each transaction.
For instance, you'll see many processors and giving platforms charge something like 2.9% + $0.30. Some will also charge a percentage for ACH donations.*
But the sticker prices you see on most church giving platform websites aren't what the merchant processor charges. Read on to learn about the two ways most church mobile giving providers make their money.
*Note: If you see a platform charge a % for ACH donations, move on. It's a made-up fee to squeeze more out of your church. Neither the processor nor the giving platform has to deal with the credit card companies when a donor gives via ACH, so there is no need for them to charge a percentage to recoup expenses.
Many church online giving platforms charge their own fees on top of the processor fees. These fees show up in a couple of different ways.
The first is by charging a subscription fee. The amount of the fee varies from one company to another, but almost all of them have a subscription fee. Those that don't have a subscription fee use the second fee type mentioned below...
The second fee comes in the form of what's called "Rev-Sharing." Keep reading to learn why Rev Share is so important to know as you choose a platform.
This is a relatively new term, but it's really important for you to understand as you choose a church giving software.
Rev-share, or revenue sharing, is the act of providers taking a cut of the donation.
So we know the merchant processor (the company handling the transaction) takes a percentage fee off every transaction. Rev Sharing is the act of the provider adding their own percentage on top of what the processor charges. In other words, many online giving providers also "skim off the top."
In fact, many church giving platforms earn more through revenue sharing than they do from subscription costs. That's how lucrative this business model is!
Below are 13 of the most popular online giving providers and their fees:
You probably picked up on some similarities, with many charging something like 2.9% + $0.30 for card transactions and 1% + $0.30 for ACH donations.
There are two factors influencing the fees you pay:
The first is obvious - Which platform you choose will greatly influence how much your church loses to fees.
The second factor is the donor payment method.
You probably noticed in the section above that processors and platforms have different fees for ACH donations than the credit card fees. That's because ACH is a bank-to-bank transfer. No card companies are involved, so the cost to the processor is much lower.
That means you have the chance to reduce the fees your church pays by promoting the ACH giving option to your members.
Which platform is right for your church depends on your needs.
The fees play a big factor, but they're not the only reason to choose one platform over another. You should also consider other features the platform offers, opportunities to brand the giving portal, etc.
But below are the best online giving platforms for most churches:
For large churches (1000+ members), platforms like Vanco or Subsplash will be your best option.
Unlike other providers, they offer volume-based discounts. Even though they charge a much higher subscription fee than other platforms, your church takes in enough donations that you will likely see a cost savings benefit with the lower transaction fees.
Schedule a call and a demo with those providers so you can see for yourself what they offer and what rates you can negotiate with them.
For churches under 1000 members (which is about 98% of all churches) ChurchTrac has some of the lowest fees you'll find anywhere. Why? Because we're part of the minority of church giving platforms that doesn't do rev-share. In other words, the fee you see is the fee from the processor (not us). We don't add our own donation fee on top of that.
And we also don't charge extra to use the giving feature or make online giving an extra cost. You can record an unlimited number of donations in ChurchTrac with any paid subscription.
If you qualify for Stripe's nonprofit discount, the Stripe processing fee is a mere 2.2% + $30 for credit and debit card donations and only $0.25 flat rate for ACH. Imagine how much your church can save by paying just $0.25 per transaction!
Again, we do not add a fee to the transaction or charge an extra subscription fee for the giving platform. No rev-share, no price gouging! That way, your church keeps more of the donation!
Now that we've covered online giving fees, how they work, and which online giving platform is best for churches, let's talk about how your church can minimize the fees you'll pay.
You have to choose the right platform for your church. It needs features that you and your leaders want. It would also be best if it integrates with or is included with the church management system you're already using.
You also need to count the cost of each platform. This is more than just choosing the platform with the lowest percentage rate, though.
Watch our video where we break down several of the most popular giving platforms, their fees, and how to choose the right platform for your church:
How to know the cost:
How much money did your church receive in online donations last year? Subtract the percentage listed on the platform's pricing page (2.9% in most cases) from that amount and that's close to what you'll pay in fees.
But you also need to factor in the platform's subscription cost. Because if they're charging you just to have an online and mobile giving platform, that price factors into the overall cost of doing business with them.
The best thing your church can do to save money is to encourage donors to do what benefits your church. That means promoting the ACH option as your preferred way they send an online donation. No matter which platform you choose, this will save your church SO MUCH MONEY.
But you can take the cost savings even further by mentioning the option for donors to cover the fee. Donors want to know their money is going to something they support. If they know some of their money is going to the processor, they'll be more likely to help your church keep the full donation.
And knowing is half the battle, right?
Arm yourself with this knowledge, calculate the fees, and communicate what's best with your members as you choose the best online giving platform for your church.