From your morning take-out coffee order to the cashier at your local grocery store, it seems like everyone’s asking for a tip these days. Whenever that digital kiosk swivels around to ask if you’d like to add 10, 15, or 20 percent to your total, you may feel like letting out a little groan. And nonprofit donation pages aren’t immune to the tipping craze!
You might be asking yourself why donation forms would include the option to give a tip. So, before we dive into donor tipping, we need to establish some background information. Many software platforms have fees to process donations through their system. Often, these are called processing fees and are charged per transaction. They include the merchant charge for credit card or ACH transactions and a charge by the fundraising platform to cover general maintenance and updates.
What is a donor tipping prompt?
Some fundraising platforms offer a “tipping” option. With donor tipping, the platform waives the fee charged by the platform for a nonprofit to use its system. Instead of charging organizations, the platform asks donors to add an additional 10-20% to their donation as a “tip” to support their services—not the nonprofit’s work. In these cases, the tips replace the charge by the fundraising platform, but nonprofits still need to pay the credit card or ACH merchant fees.
Often, the option to tip can be buried on donation forms and pre-selected, so donors might miss it and will be surprised by their donation total when they reach the end of the process. Some platforms add the tipping model to donation forms with a confusing process to opt out, so donors perceive the tip to be mandatory to complete their donation. Others highlight their tipping option as a major part of their donation forms, making the form look unnecessarily long and messy. Regardless of how donor tipping is implemented, the donation process can easily leave a bad impression on your donors, making them less likely to give a second time or abandon their first donation attempt before they reach checkout!
However, there is an alternative to donor tipping for organizations wary of asking their donors to tip fundraising platforms.
What is a processing fee prompt?
Some software companies, like Qgiv, offset processing fees by giving donors the option to “cover fees” on the donation form, adding a small percentage of their donation to the total amount—around 3-5%. By giving your donors the option to add a little extra to their donation, more of their gift goes to your organization, and the additional amount takes some of the burden off your nonprofit to cover processing fees. With Qgiv, nonprofits have the option to ask donors to help cover these processing fees with GiftAssist.
The ask to cover processing fees is generally an understated addition to a donation form and is designed to give the donor transparency and control throughout the donation process. Donors are often provided with the exact amount that will be added to their donation total upfront. This eliminates any surprises at checkout, leading to a better giving experience for donors and no impact on conversion rate for nonprofits.
Donor tipping vs. Qgiv’s GiftAssist option
With tipping models becoming a more popular option for nonprofits, you might wonder if it’s a good choice for your nonprofit as well. Before you start asking your donors for tips, consider the cost to your organization and the impact it will have on your conversion rates, donation amounts, and more.
The biggest differences between covering processing fees with models like Qgiv’s GiftAssist option and the donor tipping model are the language used to make the ask, the placement of the ask on the donation form, how the ask was implemented, and how much donors are asked to add to their donation.
Donor tipping uses transactional language
When nonprofits establish the donor tipping model option on their donation forms, they use largely transactional language, which turns off potential donors. Donors give to your organization because they believe in your mission and want to support it.
With the donor tipping model, donors are asked to tip the fundraising platform to continue making their work possible. Essentially, the tip appears on your donation form as the platform making the ask, not your organization. This can be confusing to donors who might have minimal information about a fundraising platform’s work and don’t have any incentive to support the fundraising platform in addition to your organization.
With Qgiv’s GiftAssist option, nonprofits can customize the language they use to ask donors to cover processing fees. Instead of centering the ask around supporting the fundraising platform, organizations can choose to stick to a message about supporting their work, which was the original motivation for coming to their donation form in the first place.
Donor tipping distracts from your donation
The donor tipping ask is often presented to donors in one of two ways. It can be heavily highlighted on donation forms, adding bulky logos and copy to your donation form from the fundraising platform you’re using. Other platforms may choose a less forthright approach, hiding the tipping prompt or making it confusing to opt out. Furthermore, when choosing to use donor tipping, you might not have any control over how it’s presented on your donation form, so what the platform determines for the design and copy is what you get!
When using Qgiv’s GiftAssist, the option to cover processing fees is presented in a way that is transparent, less overwhelming for donors, and doesn’t put significant pressure on donors to opt in. GiftAssist is a subtle addition to the donation form and actually helps nonprofits increase their revenue.
Donor tipping asks for a higher percentage
More often than not, when platforms offer a tipping option, they request that donors tip anywhere between 10-30% of the donation amount to their platform. On the other hand, processing fees are usually around 3-5% of the donation, making tipping double the cost of covering processing fees.
When donors agree to help your organization cover processing fees, they’re doing so out of the goodness of their hearts. Asking donors to cover a higher percentage and hiding that ask is understandably more off-putting than asking for the smaller percentage that comes with a simple processing fee ask. As such, many organizations see a significant drop in donation conversion rates when asking for a large tip on their donation forms. The lack of transparency can also negatively impact the donors trust within the organization, leading to more long-term impacts on donor retention.
Being asked to add a smaller percentage to their donation is obviously easier on the wallet for your donors and feels less daunting. Based on data collected from nonprofits that use the Qgiv system, nonprofits see a 1.5% improvement in conversion rate when nonprofits enable GiftAssist on their donation forms.
Best practices for processing fee prompts
Implementing a processing fee prompt on your donation form requires a lot of consideration. Ultimately, donors aren’t opposed to adding more to their donation amount to cover processing costs. In an experiment with the American Cornerstone Institute’s donation form, NextAfter found that about 60% of donors did opt in to cover fees, and other platforms have also found similar rates of success. To add a donation fee prompt to your donation form in a way that doesn’t negatively impact your conversion rates and revenue, there are a few things to keep in mind.
Use subtle language
Instead of calling your processing fee a tip, consider using alternative language so donors aren’t turned off by being asked for yet another tip in their day-to-day lives. As the ACI discovered in their experiment, transactional language on their donation form proved to be detrimental to their conversion rates, so it’s best to stick to neutral and positive language when asking donors to add to their gift. Additionally, make sure your message is about supporting your organization as opposed to the fundraising platform you’re using. Keep your ask donor-centered, and make sure your donors understand how the added amount will make an impact. Try using language like this:
- “Make a bigger impact by adding X% to cover processing fees.”
- “I would like to help cover fees so 100% of my donation goes towards [Organization Name].”
- “Add a little extra to cover processing fees and make my gift go further.”
Avoid long content
When asking for a processing fee, keep your ask short and sweet. Make it clear to your donors why the additional amount helps but avoid adding too much copy to your donation form. If your ask significantly lengthens your donation form or looks too bulky, you may turn off donors not just from covering processing fees but from donating altogether.
When donors have too many decisions to make or when the donation process feels too long-winded, it can overwhelm them and increase the chances they abandon the donation form completely. Keep your ask to one or two sentences, and make sure it’s informative.
Just as it’s a best practice to make sure donors know how their donation is being used, it’s essential to be transparent with your donation fee ask. If you’re asking donors to add more to their donation amount, you should let them know how much will be added and what their donation total will eventually be.
If you’re adding the processing fee as a set percentage, make sure it’s a reasonable amount. Most agree that 3% is a good starting point because it’s an amount that most people associate with credit card processing fees.
You should also update donation amounts in real time when donors opt in to cover processing fees. It can be more effective to add the option to cover processing fees early in the donation process so they know what their total will be sooner rather than later. But no matter where you add the processing fee ask on your donation form, your donors should always be aware and informed about how much their donation total will be and the impact they’re making with every step of the donation process.
Additionally, give your donors the choice to opt in to adding to their donation amount rather than opting out. Programming your donation fee prompt to be pre-checked can come across as pushy to your donors, and if your donors forget to opt out, they might feel as though you aren’t being transparent with your donation process. Give donors control over their decision to add to their gift.
Donation fee prompts are becoming more and more common on nonprofit donation forms, so if you’re nervous about adding a prompt to your donation, know it can be done successfully! If you want to avoid adding a prompt to your donation form, you have alternatives, like raising your fundraising goals to account for processing fees. However, if you choose to implement processing fee prompts on your donation form, stay away from the donor tipping model, and make your ask respectful, reasonable, and simple. You’ll be able to sit back and watch your conversion rates and revenue increase!