Latest / The Nonprofit Podcast / Ep 135| The Hidden Costs of 'Free' Donation Platforms

Transcript

Ep 135| The Hidden Costs of 'Free' Donation Platforms · The Nonprofit Podcast

0:04
SPEAKER_00: The Nonprofit Podcast, powered by DonorBucks.
0:09
SPEAKER_01: Ever heard the saying, nothing in life is truly free?
0:12
SPEAKER_01: When it comes to building strong relationships with your donors, that could not be more true.
0:18
SPEAKER_01: In today's episode, we'll dive into why you should be cautious of fundraising platforms claiming zero fees and explore how these fee-free promises might harm your donor trust.
0:28
SPEAKER_01: Plus, we'll share some alternative options that could make your fundraising efforts smoother and more effective.
0:35
SPEAKER_01: Welcome to the Nonprofit Podcast.
0:37
SPEAKER_01: I'm Jenna, Education and Community Engagement Manager here at DonorBox.
0:42
SPEAKER_01: We are here each week with practical actions you can use today to take your nonprofit to the next level tomorrow.
0:49
SPEAKER_01: Today, we are tackling an often misunderstood topic: fee-free donation platforms.
0:56
SPEAKER_01: They sound appealing, but what's really happening behind the scenes?
1:00
SPEAKER_01: In this episode, we'll uncover what these platforms might not be telling you and introduce a more transparent alternative.
1:08
SPEAKER_01: Join us as we explore the real impact on nonprofits and donor trust.
1:12
SPEAKER_01: So, what is a fee-free platform?
1:17
SPEAKER_01: Essentially, these platforms claim not to charge nonprofits or donors any fees for processing donations.
1:24
SPEAKER_01: That sounds amazing, right?
1:26
SPEAKER_01: Zefi is a key player here, marketing itself as the only 100% free platform.
1:32
SPEAKER_01: Give Butter, another popular choice, takes a slightly different approach, focusing on social fundraising and peer-to-peer engagement while relying on donor tips to cover operational costs.
1:43
SPEAKER_01: For small to mid-sized nonprofits, especially those with tight budgets, this sounds like a dream.
1:50
SPEAKER_01: You're told you can keep every penny of your donation.
1:53
SPEAKER_01: But here's the catch.
1:55
SPEAKER_01: It's not that simple.
1:56
SPEAKER_01: So I want to break that down today.
1:59
SPEAKER_01: There are a few platforms that market themselves as being completely fee-free.
2:04
SPEAKER_01: But here's what they don't emphasize enough.
2:07
SPEAKER_01: Donors are encouraged to leave tips to support the platform's operations.
2:12
SPEAKER_01: So instead of charging a fee to the nonprofit, the donor gets a nudge to foot the bill.
2:18
SPEAKER_01: Imagine your donors feeling so good about supporting your cause, only to realize part of their donation is funding the platform.
2:27
SPEAKER_01: Similarly, others use a clearly articulated tipping model where donors are asked to cover platform costs through tips.
2:35
SPEAKER_01: And it's worth noting that this shifts the financial responsibility from nonprofits to donors.
2:40
SPEAKER_01: This could work well for grassroots movements and peer-to-peer campaigns, but what happens when donors begin to feel overwhelmed by these requests for extra contributions?
2:52
SPEAKER_01: Or if they choose not to tip, some platforms will apply a percentage charge well over industry standards, hitting your financial bottom line.
3:00
SPEAKER_01: This brings up a bigger issue.
3:03
SPEAKER_01: Donor trust.
3:04
SPEAKER_01: Donor trust, you guys.
3:06
SPEAKER_01: Transparency is the foundation of donor relationships.
3:10
SPEAKER_01: If a donor thinks their entire gift is going to your cause, but then they're asked to tip or they notice unexpected platform fees, trust can erode over time.
3:21
SPEAKER_01: So if fee-free platforms aren't really free, what's the alternative?
3:26
SPEAKER_01: This is where platforms like DonorBox come in.
3:29
SPEAKER_01: Unlike fee-free platforms, DonorBox offers clear upfront pricing with no hidden surprises.
3:37
SPEAKER_01: For a 1.75% platform fee, nonprofits get a full suite of powerful tools, custom donation forms, CRM, and so much more, even on the standard plan.
3:49
SPEAKER_01: Plus, standard transaction fees from payment processors like Stripe or PayPal apply to donations.
3:55
SPEAKER_01: Transparency isn't just about keeping more money in your nonprofits' pockets.
3:59
SPEAKER_01: It's about building and maintaining trust with your donors.
4:03
SPEAKER_01: Nonprofits know exactly what they're paying for, and donors see exactly where their money goes, fostering confidence and long-term support.
4:12
SPEAKER_01: It's not just about managing fees, it's about creating donor relationships that fuel your mission, anchored in that transparency and trust.
4:21
SPEAKER_01: When donors see unexpected fees or are just asked to tip for what they assumed was a free service, they start to question not just the platforms, but sometimes even the nonprofit they're trying to support.
4:32
SPEAKER_01: And let's face it, in a world where every donation counts, the last thing you want is to create any hesitation or confusion.
4:41
SPEAKER_01: When a donor notices an unexpected charge on their bank statement, it can lead to confusion and frustration.
4:48
SPEAKER_01: And unfortunately, those negative feelings may get tied to your organization.
4:53
SPEAKER_01: Your brand is one of the most valuable assets, both for attracting donations and making an impact in your community.
5:02
SPEAKER_01: Once a donor associates your brand with a negative experience, it can be really challenging to rebuild that trust.
5:11
SPEAKER_01: But it's not just about trust.
5:13
SPEAKER_01: It's also about what your platform can do for you, what your platform can do for your organization.
5:21
SPEAKER_01: You need tools that assist your fundraising efforts and help you meet your goals, no matter how wide-ranging your campaigns or channels may be.
5:29
SPEAKER_01: And that's why a transparent, robust alternative matters.
5:33
SPEAKER_01: It's about having access to the right tools for growth, whether it's managing a simple donation campaign or scaling up to more sophisticated fundraising efforts.
5:43
SPEAKER_01: And this is where DonnerBox truly shines.
5:46
SPEAKER_01: So let's take a look at how these free platforms stack up in terms of features.
5:52
SPEAKER_01: Here's a quick overview of key features from two popular fee or tip platforms.
5:58
SPEAKER_01: Give Butter again works for social fundraising and peer-to-peer campaigns, especially for those small grassroots initiatives.
6:05
SPEAKER_01: While Zeffe is ideal for budget-conscious organizations, but it lacks some of the advanced features and integrations nonprofits might need as they grow.
6:15
SPEAKER_01: And as I mentioned earlier, it's still operating on a tipping model, so it may not be as free as it claims.
6:22
SPEAKER_01: On the other hand, DonorBox is designed for nonprofits that are gearing up for growth.
6:28
SPEAKER_01: We offer a comprehensive suite of features that empower your organization to grow sustainably.
6:34
SPEAKER_01: From outreach to stewardship, you need tools to enhance your donor and data management at every single level of your organization.
6:45
SPEAKER_01: For example, our built-in CRM enables you to manage donor relationships effectively, allowing for segmenting, for personalized outreach that deepens that donor trust and engagement.
6:57
SPEAKER_01: With DonorBox Live Kiosk, you can effortlessly capture real-time donations during on-site events, creating a super seamless experience for your supporters.
7:07
SPEAKER_01: Our recurring donation feature encourages long-term giving, turning those one-time donors into dedicated advocates for your cause.
7:15
SPEAKER_01: Plus, our integrated events tool simplifies event ticketing and registrations, making it easier to organize successful fundraising events.
7:24
SPEAKER_01: And with 24-5 Monday through Friday customer support and weekend availability as well, with an average response time of 15 minutes or less, you can really count on our support team for expert assistance whenever you need it, ensuring you get the most out of your suite of fundraising tools.
7:43
SPEAKER_01: So, what should you take away from all of this?
7:47
SPEAKER_01: As a nonprofit, your reputation is tied to the trust your donors place in you.
7:52
SPEAKER_01: That's why understanding the full picture behind so-called free platforms is so important.
7:58
SPEAKER_01: Here's the bottom line, you guys.
8:00
SPEAKER_01: While fee-free platforms may sound so appealing, they often come with hidden costs that could impact donor trust.
8:09
SPEAKER_01: Donor Box, with its transparent fee structure, ensures your donors know exactly where their money is going, and that builds long-term relationships.
8:18
SPEAKER_01: We are dedicated to helping you help others.
8:21
SPEAKER_01: If your nonprofit is seeking a solution that's both ethical and effective, DonorBox might be the right platform for you.
8:29
SPEAKER_01: Together, we can empower your organization to thrive without hidden fees or donor confusion, allowing you to focus on what truly matters, your mission.
8:38
SPEAKER_01: Thank you for joining us on the Nonprofit Podcast.
8:41
SPEAKER_01: I hope you've left with the confidence to take a small step today that will make a big difference tomorrow.
8:47
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8:57
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8:59
SPEAKER_01: You're here to help others, we're here to help you.
9:02
SPEAKER_01: Until next time, stay inspired.
9:05
SPEAKER_00: That warm feeling when you help someone, it's not just happiness, it's fulfillment.
9:10
SPEAKER_00: And we believe it should be available to everyone.
9:12
SPEAKER_00: From frontline heroes to first time fundraisers.
9:16
SPEAKER_00: Our tools empower you to help others.
9:18
SPEAKER_00: This is our mission.
9:20
SPEAKER_00: This is DonorBox, helping you help others.