Tip Model Pricing vs. Percent Pricing: What’s the difference?

To accommodate the needs of all organizations, we offer two options for covering fees: Tip Model Pricing and Percent Pricing.

With Tip Model Pricing, there is no platform fee for the organization. Instead, donors have the option to leave a tip in the checkout process. The credit card processing fee will automatically come out of the amount raised by the organization. A detailed breakdown of how Tip Model Pricing works is below.

With Percent Pricing, both the platform and credit card processing fees can be paid by the organization running the experience, the donors, or both (by splitting the fees between each). We've outlined the specifics of Percent Pricing below.

To continue providing an exceptional fundraising platform, Givebacks is powered by fees collected through each experience. Every experience run through Givebacks is subject to two types of fees:

1. The Givebacks fee (also known as the “platform fee”)

Your organization (or its donors) will only have to pay the Givebacks fees when you have an active experience. There are no additional subscription fees for Givebacks fundraisers.

2. Credit card processing fee

Every type of experience can collect payments by credit card. All credit card processing is performed by Stripe, not Givebacks. Like every payment processor, they charge their own fee for processing payments. As of July 1st, 2023, the processing fee is 2.9% +$0.30/transaction (3.5% +$0.50/transaction for American Express).

 

Options for covering fees

Tip Model Pricing

Tip Model Pricing allows organizations to keep nearly 100% of the funds raised. You won’t need to budget for the cost of using our platform, and there are no hidden costs or subscription fees. It allows donors to chip in and cover the cost of fundraising on your organization’s behalf, thereby maximizing donation amounts for your cause. 

1. Platform fee - With the Tip Model Pricing, the platform fee is covered by providing donors the option to leave a tip in the checkout process. This tip is optional for donors; they can opt out of leaving a tip on their donation if they choose. The money from the tip goes to Givebacks and is therefore separate from the donation amount that the organization receives. If no donor leaves a tip, there are still no platform fees charged for the experience. 

Tip Model Pricing is an attractive choice for many organizations because it allows the nonprofit organization to keep more of the funds raised by not having to pay a platform fee. 

The platform fee for the Tip Model Pricing works a bit differently for raffles and sweepstakes versus other experience styles: 

      • Raffles and Sweepstakes – If donors choose to leave a tip on the experience, they will receive a few bonus entries into the drawing for doing so. Your organization runs the entire experience for free. 
      • Non-drawing experiences – For a-thons, events, challenges, sales, and crowdfunding experiences, donors will still have the option to leave a tip to cover the platform cost. Again, the tip is optional and allows the organization to keep more of the funds raised. For non-drawing experience, donors do not receive anything extra for leaving a tip. There are still no subscriptions, contracts, or upfront costs for running an experience, and this pricing model allows you to keep nearly all of the funds raised. 

2. Credit card processing fee – With the Tip Model Pricing, the credit card processing fee will automatically come out of the amount raised by the organization. In other words, the organization covers the credit card processing fee on each donation by having it deducted from the donated funds. There is no option to have the donor cover the credit card processing fee with the Tip Model Pricing.

For example:

A donor makes a $10 donation and leaves a $2.50 tip. The total amount charged to the donor is $12.50. For this transaction, your Payout report will show the total amount charged to the donor, the fees deducted, and finally, the net amount your organization receives.

Here’s how this breaks down:

    • Your organization receives: $9.48 ($10 donation minus the credit card processing fee of $0.52)
    • Givebacks receives: $2.44 ($2.50 tip minus the credit card processing fee of $0.06)

Percent Pricing

Percent Pricing is an alternative to Tip Model Pricing and is ideal for organizations with a set budget or corporate sponsors who prefer not to have their donors prompted for tips after checkout. 

With Percent Pricing, both the platform and credit card processing fees can be paid for by the organization running the experience, the donors, or both (by splitting the fees between each).

1. Platform fee - The Platform fee for Percent Pricing is 7.5% and will be applied to each transaction. 

2. Credit card processing fee – The credit card processing fee is applied to each transaction.

There are several choices for paying both fees:

  • Passing on fees to your donor
  • Having the organization absorb all fees
  • Giving the donor the option to cover it in the checkout process

Passing on fees to your donor

During experience setup, you may choose to have both the platform fee and credit card processing fee added to each donation to be paid by the donor. This would allow you to maximize the amount received for each donation.

Have the organization absorb all fees

Or, you can choose to have your organization cover both fees. This option would not add any fees to the donor. The donor would only be charged the amount of their donation and the organization would pay the fees by having them automatically deducted from the total amount raised on their experience.

Split the fees

At checkout, you can ask the donor if they want to cover the processing fees on behalf of the organization.

 

All of these options are available to you during the experience setup process. While there are many pricing options to consider, our objective is to ensure all organizations have the freedom to set up fees in the way that best suits their budgetary requirements and fundraising goals. 

 

Questions? Contact Givebacks Support.

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