“Donor Covered Fees,” previously called Classy Mode and fee-on-top, is a relatively straightforward feature in the Classy platform. It gives your donors the option to cover the transaction fees associated with their donation.
The benefits of Donor Covered Fees are twofold. On one hand, it’s a great way for your organization to receive the full amount of a donation, which increases revenue. It’s also an opportunity for you to delight supporters with a chance to go the extra mile for your cause.
Here we’ll discuss Donor Covered Fees and why enabling it on your fundraising campaigns could be a central part of your success moving forward.
Donor Covered Fees: Engage
Donor Covered Fees was officially released for all new Fundraising Suite campaigns in August 2016. You, as the campaign owner and manager, can turn Donor Covered Fees on in the campaign editor, on the donation page under donation settings.
Below is a screenshot of the interface (note: Donor Covered Fees is still called “Classy Mode” in the platform, though it will be changing soon).
Enabling Donor Covered Fees will put a box on the donation form that supporters can click to help cover the donation fees on their gift. In the Classy platform, you can choose a custom percentage that adds on anywhere from 0% to 15% of the donation to the final gift amount. This range covers every possible processing fee amount when using Classy, and you can choose a custom percentage for each of your campaigns or set a global percentage that applies across all of your efforts. The donor will be presented with a new donation total that includes the fee. The total will automatically update:
You can also choose to have Donor Covered Fees selected by default: users will cover the cost of the transaction fee unless they uncheck the box. Donors still have the choice to cover the transaction fee, or not, in every contingency.
While the choice is yours to make, organizations that enable Donor Covered Fees and have it selected by default tend to report better numbers among supporters. Learn more about how Donor Covered Fees work.
Donor Covered Fees by the Numbers
From what we’ve seen with Donor Covered Fees, if it’s enabled on a campaign, people tend to use it. Further, while default pre-checking the Donor Covered Fees box may feel like a bold move, it tends to lead to more supporters covering donation fees as well. Here’s some of the data our team has collected:
- 50% of donations use Donor Covered Fees; 80% of the time, it was available to the donor
- If available, donors choose to cover transaction fees 55 to 60% of the time
- When Donor Covered Fees is on by default, 75 to 85% of donors cover transaction fees
The takeaway here is that you should make sure Donor Covered Fees is an option for your supporters. Also, if it’s not checked by default, people still tend to make another click to cover the transaction fees.
Your supporters, as the data may imply, are interested enough in what you’re doing that a large percentage of them are willing to go this extra step. And that extra step helps you raise more money for your cause at the end of the day.
The Other Benefits of Donor Covered Fees
Some donors are unaware that there are fees associated with online transactions. They assume the full amount of their donation always goes to the organization. That is, after all, what they want in the first place. Thus,
You might ask yourself: “If I’ve already convinced someone to donate to my cause, why would I also want to push them into covering a fee?”
You should instead ask: “If this person has already invested in my mission and its impact, why wouldn’t they want to go the extra step and cover the fee?”
Donors feel good about this decision to give. It shouldn’t feel like you’re pushing them to do something they don’t want to do. Donors are already doing a good thing by supporting your cause, and Donor Covered Fees is a way for them to go even further.
“A few years back, just asking to cover the fees for a donation made nonprofits take a step back. They wondered, ‘Are we being too forward?’ or ‘How are our supporters going to feel about this?’ These are all great things to think about, but the continued exposure to other fee-based services around the internet has made it less of a concern.
The data on Donor Covered Fees illustrates this as well. Donors choose to cover the donation fees when the option is available, ensuring their entire donation makes it to the nonprofit.
“While fees vary by platform, simply asking for donation fees to be covered can lead to a bump of 3 to 5 percent increase in revenue. With every dollar making a difference in the nonprofit world, this is huge ROI with little additional effort.
The ultimate impact is that your organization gets what the donor initially intended to give. If they wanted to give $25, but don’t select Donor Covered Fees, you’re just getting the net of that donation, which is less than $25.
If the numbers show anything, it’s that you should give your donors the chance to cover their donation fees with Donor Covered Fees. Aside from being an easy way for your organization to increase revenue, it’s a good way to delight your supporters.
Someone who has already engaged with your marketing materials, learned about your campaign, and made the decision to donate to your cause is on board with what you have to offer. They’re invested in your cause.
And then, at the bottom of your donation page, you can give them the opportunity to go even further. Reward your donors with the feeling like they’re going above and beyond the call of duty to help you out even more.