How are other organizations entering admin fees?

Joelle Ferreira 3 · April 2019

Hi Everyone,

Just a quick question about how other organizations are entering administrative fees.

We run a national campaign where donors make a gift online, and then we remove 10% of the of the donation to cover transaction fees and the hard costs related to processing the gift. If someone chooses to cover the administrative fee through the online platform, we take a percentage off the gift, but not off the additional gift which covers the admin costs. These funds are then re-distributed to our partners across the country.

Our current process is to input the total amount given by the donor, and then to manually remove the administrative costs. We send a letter explaining the breakdown to our donors. It's a ton of work, and it messes up our reporting as the gifts are going in as a the full amount.

How are other organizations entering admin fees? Are you entering them as two gifts? Do you only input the net amount? Any insight into other organizations would be helpful.

Thanks in advance!

John Heizer · April 2019

Fees are a cost of doing business and shouldn't affect the credit given to the donor. Do you also deduct fees when someone pays by check? You have to use labor to process the check (probably even more expensive in-house labor than if by online credit card). That labor costs money. Why do you deduct fees for one type of transaction and not another?

Joelle Ferreira 3 · April 2019

Hi John,

Sorry, I should clarify. The way the campaign works is that individual donors raise money designated to their local food bank. We then keep a portion of the donation for our organization (that's the processing fee) and the rest of the funds goes to the local food bank. The letter we send with the break down of the funds goes to the food bank, not the donor (apologies for the error!).

I'm trying to figure out a way to easily capture how much the donor has given, but also breaks down what goes to the food bank and what stays with us.

Sunshine Reinken Watson · April 2019

I haven't put this into action, but I was considering adding a gift attribute for fees to ease reconciliation with finance. I would use this for third party providers, not for everyday credit card transactions.

JoAnn Strommen · April 2019

We enter the original gift amount whenever known. We do not track fees in RE. As stated, it's the cost of doing business. We have seen an increase over the years of gifts coming on behalf of/processed by third party where we do not actually know the original amount. In most all of those cases we are not the organization issuing a tax receipt, just a thank you.

Michelle Maye · April 2019

We give the donor full recognition for their donation and notify finance of both amounts so they can do a journal entry each month.

How are other organizations entering admin fees?

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