There may be deductions from the gross donation amount, depending on where the donation was made and the form of payment. There are two types:
1) card processing costs
Virtually all donations are made via credit or debit card, and a 2.9% + $.30 per transaction fee covers the card processing costs charged to us.
2) technology fee or tip
In cases where there is no optional tip on the donation form, there is a technology fee that Pledgeling Foundation pays to its service providers – this pays for payment processing and disbursement, including staff, infrastructure, customer support, office space, and more. This is deducted from the gross donation amount before it is paid to the charitable organization. It works as follows:
a) When the donation is made from a third party partner's site:
- you may have the option to "cover our costs," which increases the amount of the credit / debit card charge enough to pay the card processing and technology fees; or
- the partner site may pay the technology fee.
b) When the donation is made from a nonprofit's site or platform, for instance via a "widget" or our text-to-donate service, the nonprofit agrees to pay the 3% technology fee.
There is no technology fee when you have the option to make a tip in addition to your donation, such as when you use Evite donations. This is true even if you opt out of making any tip. The tip is voluntary and adjustable, and we display it to you before you OK the charge. It is different from the technology fee since it does not change the amount reaching the charitable organization – the tip is in addition to the donation amount. Because these tips flow immediately to a for-profit service provider, under IRS rules they are not tax deductible to you, the donor; not reported as part of the donation on the emailed tax receipt; and we do not report them as donations on our tax filings.