The surprising truth about fundraising fees — and how much they’re costing your mission

Many nonprofits believe that every donation goes straight to their cause. But behind the scenes, fundraising fees quietly chip away at those totals. Most online platforms don’t charge a single fee; they stack them.

There are platform, credit card processing, and payout fees. These hidden costs can add up fast, and most teams don’t realize just how much is being skimmed off the top.

Across the sector, billions of dollars are lost each year to transaction and platform-related charges. That’s funding that could have supported services, staff, or supplies, but instead ends up with third-party providers.

Today, we’ll discuss where these fees come from, how much they really cost over time, and what you can do to keep more of each donation. Let’s take a closer look.

The actual cost of fundraising fees

Fundraising fees come in several forms:

1. Platform fees are one of the most visible. Many fundraising platforms charge a percentage of each gift, typically between 2% and 10%.
   
   That means a $100 donation could be reduced to $90–$98 before your organization even receives the funds. Even modest platform fees, like 5%, reduce your usable revenue on every single gift.
   
   
2. Payment processing fees are also unavoidable. Whether a donor pays by credit card, debit card, or digital wallet, the payment processor takes a fee, typically 2.9% plus $0.30 per transaction. That means a $100 donation could incur an additional $3 fee to cover payment processing.
   
   Some nonprofits with special rates might see slightly lower charges, but most pay this standard rate even on platforms that claim to be “free.”
   
   
3. Payout or withdrawal fees add another layer. Once donations are credited to your account on the platform, transferring them to your nonprofit’s bank account may incur additional costs.
   Standard payouts may take a few days, but faster options often include added fees, sometimes as high as 3% for instant transfers or 1.5% for international wires. These are on top of what you’ve already paid in processing.
   
   
4. Donor “tips” and optional fees. Many platforms ask donors to tip during checkout or cover transaction fees, and these tips are usually pre-selected by default.
   
   Moreover, some platforms are designed so that tipping is the only way to avoid direct charges. If you disable tipping on these systems, they apply a platform fee instead, typically around 3%, which includes processing costs.

What these fees mean for your mission

Every fee you pay is money that doesn't go toward your work. When you're running programs that serve real people, even small amounts lost to fees can have a significant impact.

If your nonprofit provides food, less money means fewer meals. If you focus on education, it could mean fewer scholarships, books, or supplies.

For example, Feeding America says that just $1 can provide at least 10 meals. That means losing $7,000 in fees could translate to 70,000 meals not reaching families in need. It’s the same story in education and healthcare. UNICEF USA notes that $265 can fund a one-year scholarship for a girl. A $10,000 loss in fundraising fees could have paid for nearly 38 scholarships.

The real problem is how these fees add up over time. A 5–8% cut might not seem like much per transaction, but it builds quickly. If your organization raises $500,000 online in a year, a 5% fee means $25,000 is gone. Every recurring gift incurs fees each time, which slowly erodes your most reliable source of funding.

There’s also the trust factor. When donors learn that part of their gift went toward fees, it can erode confidence. Research shows this disconnect can lower future giving.

In the end, fundraising fees don’t just hurt your budget. They reduce your impact and weaken your relationship with your supporters.

Where fees are hiding (and what to watch for)

Even “free” fundraising tools can have hidden charges if you’re not careful. Common traps include:

Misleading “free” platforms

Some platforms might impose per-campaign limits, or some platforms claim to be free but offer low-price packages where you don’t get full access to all the fundraising tools, and they lure you into buying high-end packages to use all the features the platform has to offer.

What starts as an affordable option can quickly become a costly upgrade when you need basic tools to run effective campaigns.

Pre-set dnor tips

Many platforms automatically add donor tips at checkout, often in the 10–15% range. Donors may assume the extra amount supports your cause, but it actually goes to the platform.

If the option to remove or adjust the tip is unclear or buried, it functions like a hidden fee and can confuse or frustrate supporters.

Extra charges for integrations

Watch closely for add-on costs. Some platforms charge monthly fees for reporting tools, donor insights, or integrations with CRMs and email systems.

These charges range from $50–$65 per integration per month, which adds up quickly if your organization relies on multiple systems.

Smart ways to avoid fundraising fees

The good news: you don’t have to accept hefty fees as a given. Consider these strategies:

Choose low or no-fee platforms

Many modern fundraising platforms now offer 0% platform fees. These systems are often funded through optional donor contributions or alternative revenue models, so your organization doesn’t have to pay out of pocket.

Switching to a no-fee provider can immediately eliminate the usual 2–5% deductions on every donation.

Insist on transparent pricing

Before committing to any platform, ask for a full breakdown of fees. Don’t settle for vague terms like “no hidden fees.” Request specific details: credit card rates, flat fees per transaction, monthly costs, or limits tied to usage.

We recommend comparing the effective rate, like total fees divided by the donation amount, to see the true cost of each dollar raised. It helps you make fair comparisons and avoid surprises later.

Enable donor-covered fees (when voluntary)

Giving donors the choice to cover the processing fee can go a long way. Most supporters are willing to help if you frame it clearly. Over 95% of donors choose to cover the 2.9% + $0.30 transaction fee when given the option.

A simple message like, “Would you like to cover the processing fee so your full donation supports the cause?” is effective. This minor tweak means more dollars stay with your organization.

Use nonprofit payment discounts

If you use standard processors like Stripe or PayPal, make sure your account is registered as a nonprofit. These services often offer discounted rates to verified charities.

You can also explore options such as ACH or direct bank transfers for large donations, which typically incur lower fees than card payments. Even a 0.5–1% savings per transaction adds up over time.

Tired of hidden fundraising costs? BetterWorld is the answer

Many nonprofits don’t realize how much they lose to fees until it’s too late. Between platform cuts, feature limits, and confusing pricing, those small percentages add up fast. BetterWorld was built to change that.

With BetterWorld, your organization can keep 100% of every donation. Donors have the option to cover the standard processing fee, and over 95% of them choose to do so. BetterWorld is fully supported by 100% optional contributions from donors, not by charging nonprofits.

There are no subscription costs, no campaign limits, and no surprise fees. You get all the fundraising tools, such as auctions, raffles, peer-to-peer, events, and more.

Sign up today and see how BetterWorld helps you save more, raise more, and put every dollar to work for your mission.