Best Ways to Donate to Charity: Save Your Nonprofit 5% or More by Giving Smart

When you donate via credit card, the charity has to pay a transaction fee of 2-3% on the transaction. If you make a $100 donation, your charity only gets $97 of it. According to a Huffington Post article, banks and card networks make about $250 million a year off of charitable donations. And it’s not just the credit card companies. Everyone from PayPal to Network for Good takes a cut. Here’s how to give to a charity, not to a credit card company.

How to donate so 100% goes to charity

Since writing this article, we heard from a new startup, Frendo, which was inspired by the Huffington Post article mentioned above to create a way for nonprofits to receive 100% of the donation amount. Charities can create donation pages on Frendo’s site at no cost, and add a “donate” button on their own websites that link to their Frendo page. Donors then create a profile linked to their bank account, through which they can donate transaction fee-free. (Frendo also allows for credit card donations with a 2.95% transaction fee).

Another surefire way to make sure your charity gets your full donation is to use cash or a check. However, that’s not always convenient in our increasingly cashless world, and international or disaster relief organizations often rely heavily on plastic for donations. Thankfully, some credit card companies will charge no transaction fee for charities, and even eat the fee that Visa/MasterCard charge. Capital One lets you choose from hundreds of thousands of charities; Chase gives you just three options.

Method Qualifiers Transaction Fee
Frendo Charities and donors must both set up profiles 0% (from bank account)
2.95% (credit card)
Cash or check Less security, more hassle 0%
Chase Ultimate Rewards Only donate to the Red Cross, ASPCA or WWF 0%
Capital One No Hassle Giving Donate via website 0%

Capital One is the best of these, in our opinion. They don’t require that you use your rewards points; whenever you donate through the No Hassle Giving site, even if you use your credit card, 100% of your donation goes to the charity. Any US-issued Capital One credit card is eligible, but prepaid and debit cards are not.

Visa, American Express give nonprofit discount

As of October 2011, Visa’s credit card interchange fee for eligible nonprofits will be 1.35%, plus $0.05. That works out to 1.4% on a $100 donation. Keep in mind, though, that while the discounted credit card rate is better than the usual credit swipe fee, you’re better off with a debit card for large donations.

American Express also offers a discount with their Members Give program: they only charge a 2.25% transaction fee. The issuer partnered with JustGive to allow cardholders to donate online to over 1 million charities. There is no transaction fee if you use your Membership Rewards Points to donate.

Network Transaction Fee
American Express Members Give 2.25%
Visa credit cards 1.35% + $0.05

Portals, PayPal and more

While we often donate to charities via their websites, we often use a portal like Facebook or Paypal to give. In fact, processing charitable donations is turning into quite the profitable business. Kickstarter, and CrowdRise are jumping on crowdsourced fundraising for nonprofits, while any number of web apps allow nonprofits to put donation portals on their sites. These portals don’t charge transaction fees, right?

Payment Option Transaction Fee
Frendo 2.95% (credit card)
0% (bank account)
PayPal 2.2% + $0.30 (monthly sales < $100k)
1.9% + $0.30 (monthly sales $100k+)
Square 2.75% (no subscription)
0% ($275/mo subscription, donations capped at $400/swipe) 3% + $0.30
Just Give 4.5%
Network for Good 4.75% (no subscription)
3% (charity has subscription)
Facebook Causes 4.75% (levied by Network for Good)
CrowdRise 3 pricing plans. Transaction fee is 5% + ($1 if donation is <$25 or $2.50 if $25+) with no monthly subscription fee, otherwise 4.95%.
KickStarter 5% of fundraising total to Kickstarter + 3-5% to Amazon Payments*
BrightFunds 7.5%

*See complete Amazon payment schedule here.

If you’re giving to a well-established charity that gets more than $100k in donations each month, your best option is PayPal. That list would include the Red Cross, which took in $500 million a month in 2006; or the American Cancer Society, which got $165,000 a month in 2010. But if you’re looking to give to a smaller charity with lower revenues and you want to use plastic, your best bet is to give directly with a Visa credit card.

Visa and MasterCard’s fees for charities

Visa and MasterCard set the interchange fees for merchants, and so are responsible for deciding how much charities pay. Unfortunately, online transactions tend to incur the highest fees, and both Visa and MasterCard decided to implement a screw-you policy of jacking up their fees on small ticket transactions. For convoluted political reasons, you’re best off with a debit card on large donations and a credit card for smaller ones. Visa debit cards have the best rates for large transactions, while the charity discount makes their credit cards ideal for donations less than around $12.

Larger charities can sometimes negotiate lower rates for themselves, but smaller ones don’t necessarily have that leverage. If you do end up donating with plastic, remember:

  • If you’re donating to a large, well-established charity, or are making a large donation, debit cards usually have the lowest fees.
  • If you’re making a donation of less than $15 to a smallish charity, the debit card fees are likely to be very, very high. MasterCard takes 2.3% of a $5 debit donation, while Visa takes either 3.8% or a whopping 4.25%.
  • Visa has a different rate for debit cards issued by banks and credit unions with less than $10 billion in assets. If your debit card donation is less than $8ish, you’re better off using one issued by a small bank or CU. Otherwise, go big or go home.
  • Credit card transaction fees differ based on the type of card. Your standard, “classic” cards have the lowest interchange fees, while high-end, high-limit rewards credit cards have the highest.

Keep this in mind when you’re donating to charity. If you’re set on using your Visa Signature or World MasterCard, donate a little bit extra to make up for the fees your charity will pay.

Transaction Type Interchange Fee Charge on $100 Donation
Visa debit, issued by $10bn+ 0.05%+$0.21 0.26%
Visa debit, issued by <$10bn 0.8% + $0.15 0.95%
MasterCard regulated debit 0.05% + $0.21 0.26%
MasterCard standard unauthorized debit 1.9% + $0.25 2.15%
Visa credit card (charity rate) 1.35% + $0.05 1.4%
Internet, standard MasterCard credit card 1.58% + $0.10 1.68%
Internet, high-value World MasterCard 2.3% + $0.10 2.4%

Data from MasterCard and Visa

  • Jaipur Ngo

    behalf of
    St. Peter’s Social Service. It is a great honour to me to bring this notice
    about poor and needy people. I am a retired
    army personnel, who has dedicated his life towards social service. I run an N.G.O. on no profit basis, except making just
    enough for bare bone living and hiring a staff. Well, I want you people to know
    that I am supporting poor and needy persons who are not able to get even one
    time food. I have been doing this service since a long time.

    Now, I am
    a retired person and not good enough to manage all these things by own.
    Therefore, I have come to you with proposal. So, I request you to contribute
    for this noble thing. Donating
    one dollar won’t affect your pocket but that one dollar is really going to help
    those persons who are doing the job of labour and wasting their lives. You
    people are very highly educated and you know its importance. Your contribution of
    one dollar will make the huge difference in their lives. Your one dollar will
    give them food to eat. Your one dollar will protect them from the diseases like
    cancer, diabities, tuberclosis and medicines to
    patients who all are fighting with these chronic diseases.

  • Winslow Strong

    Bitcoin is a good way. An intermediary like bitpay, coinbase, or similar can be used so that the donors can send bitcoin and the charity receives their local currency. I know that bitpay provides this service for free to nonprofits.

  • Hinrg4me

    If you give *a lot* to charity, you could also consider a credit card that pays you back more than the typical interchange fee. USBank has a couple options, one would be Cash+, assuming they continue to offer charitable giving as one of the 5% categories you can pick. Also their FlexPerks cards offer triple points on charitable giving, and FlexPoints can be redeemed for anywhere from $1.33-$2 in travel per point, so when tripled that is 4-6% effective reward (example: donate $10k, get 30k points, redeem for a $401-$600 airline ticket).

  • Levi Webb

    Network for good is about the worst way to donate to charity. I am not at all sure why anybody would willingly use their service.