As the holiday giving season approaches, many Americans are preparing to support their favorite causes online. Online giving has grown rapidly, making up roughly one-third of the $3.6 billion raised nationwide last year on Giving Tuesday 2024. CharityWatch CEO, Laurie Styron, recently spoke with CNN’s Jeanne Sahadi to discuss how digital fundraising platforms handle fees and optional “tips” that can affect how much of a donation ultimately reaches a charity.
Running any online giving platform or payment processor costs money. There’s no such thing as a “free” fundraising service. Even when a website advertises that 100% of your donation goes to charity, someone is still paying the bills that keep the system running.
Servers, payment processing, security, customer support, and compliance all cost money to maintain. Those expenses may be covered through small transaction fees paid by the donor, deductions from the nonprofit’s proceeds, or subsidies from philanthropic sponsors. Donors should be realistic about these unavoidable costs and cautious of marketing language implying that giving online comes at no expense.
“Fundraising isn’t free,” Laurie Styron told CNN. These platforms “don’t run on air. Providing the service costs money.”
While online platforms have made donating faster and more convenient, they also introduce costs such as processing fees, platform fees, and, in some cases, optional “tips” to the technology companies that host donation pages. Such tips don’t go to the charity but are rather intended to help cover the operating costs of the platform by adding a percentage on top of a giver’s donation. CNN found that certain platforms even pre-populate the tip field with suggested percentages between 15% and 17%, requiring donors to actively adjust or remove the amount.
“As a watchdog we deeply dislike that,” Styron told CNN. “People are busy and they’re just trying to do a good thing. … Make it something you have to opt in (to) rather than opt out (of).”
| Platform | Direct Link | Fee / Tip Details | Notes on Coverage & Impact |
|---|---|---|---|
| Givebutter | givebutter.com/pricing | 0% platform fee if optional donor tips are enabled; if tips are disabled, flat 3% platform fee + standard processing (typically 2.9% + $0.30). | Donors can opt to cover fees or tip the platform. Offers events, auctions, and CRM tools to nonprofit clients. |
| PayPal (for nonprofits) | paypal.com/help221 | 1.99% + $0.49 per transaction for approved 501(c)(3) charity-rate accounts. Some legacy setups or PayPal Giving Fund flows may reflect 1.99% + $0.30. | Charity rate applies only to verified nonprofit accounts. The $0.49 flat fee reflects PayPal’s 2022 pricing update. |
| PayPal Giving Fund (DAF) | paypal.com/us/fundraiser/hub | 0% platform fee; processor fees are not charged to the donor in this flow. | Donations are made to the PayPal Giving Fund (a donor-advised fund) which then re-grants to the designated charity. |
| Every.org | every.org/pricing | 0% platform fee. Only third-party payment processing applies (usually ~1.0%–3.5%). | Platform supported by philanthropic grants; the nonprofit receives the full amount minus processor fees. |
| GoFundMe (standard) | gofundme.com/c/pricing | 2.9% + $0.30 transaction fee. Optional donor tip slider may be pre-populated. | Tips support the platform, not the charity. Setting tip to zero does not reduce the charity’s payout. |
| GoFundMe Giving Fund (DAF) | gofundme.com/c/blog/giving-fund-faqs | $0 to open, 0% administrative fee; donations typically ≥ $5. | Operates as a donor-advised fund that grants to eligible nonprofits designated by donors. |
| Network for Good / Bonterra | networkforgood.com/pricing | Subscription pricing charged to the nonprofit plus an additional 3%–5% per-transaction fee, depending on plan. | Full fundraising/CRM suite designed for small nonprofits; check plan inclusions and total effective cost. |
Notes: Fees can change. Confirm current rates on each platform’s pricing page. “Processing fees” are typically charged by payment processors (e.g., ~2.9% + $0.30). Optional tips, when present, generally support the platform and are separate from the donation to the charity.
Platforms structure their fees in distinct ways depending on the services they are providing. In some cases, part of the cost goes toward features that make giving easier and more secure, such as hosting live fundraising events, managing donation records, generating automatic receipts, or ensuring strong data encryption to protect donors’ personal and financial information. CNN noted that these tools can save charities time and resources by eliminating the need to build complex fundraising systems from scratch. In other cases, a platform is simply processing your donation in the same way a bank or a credit card company would, and is charging a small fee to provide this service.
CharityWatch encourages donors to seek transparency. When fees or tip explanations are unclear, it is best to either reach out to the nonprofit directly for clarification, or to consider donating straight through the charity’s own website to bypass third-party intermediaries who may be unreasonably up-charging.
Read the full CNN article here.
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