There are many ways to maximize fundraising with Kind Kiosk, but one thing you might not have thought about is how credit card processing fees impact your fundraising. There are two types of transaction methods to understand: card present and card not present. A card present transaction is when a donor donates using your Kiosk and its credit card reader, while a card not present donation is when the donor chooses to use the QR code to complete their donation using a mobile phone.
While you might think that setting the suggested donation amounts lower is the best way to increase fundraising, that’s not necessarily the case once you understand the impact of credit card processing fees. If the donor does not choose to cover the transaction fees during the donation process, then your organization is responsible for those fees. When you look at a single small donation, the fees may seem nominal – but you must think about it on a larger scale.
Before we dive into the math and figuring out how to determine the best suggested donation amounts, let’s review Stripe and Kind Kiosk’s fees.
· Card Present Transactions
- Stripe’s Fee: 2.7% + $0.05
- Kind Kiosk’s Platform Fee: 3%
· Card not Present Transactions
- Stripe’s Fee: 2.2% + $0.30
- Kind Kiosk’s Platform Fee: 3%
Ok, but what do these fees actually mean? Simply put, they are the fees that your organization pays for the ability to accept credit and debit card donations. Since Kind Kiosk partners with Stripe to handle all credit card processing, your organization is subject to the processor fee that they set, as outlined above. In addition to Stripe’s flat rate fee, Kind Kiosk sets a 3% platform fee for all transactions. Now, we know this sounds like a lot, but once we break it down further, you’ll see that these fees can have minimal impact on your fundraising – especially since Kind Kiosk offers donors the option to cover the processing fees for you!
It's often easier to understand when you see the math, so let’s do that!
Since both Stripe and Kind Kiosk have fees, it’s easiest to calculate what the effective rate (actual fee once Stripe and Kind Kiosk’s fees are combined) is per donation. Let’s look at a card present donation.
Effective Rate = (Total Fees Paid/Total Donation) x 100
How did we get there? Let’s consider a $5 card present donation:
- Stripe Fee: 2.7% of $5 = $0.135 + $0.05 = $0.185
- Kind Kiosk Fee: 3% of $5 = $0.15
- Total Fees: $0.185 (Stripe) + $0.15 (Kind Kiosk) = $0.335
- Net Donation: $5.00 - $0.335 = $4.665
Now that you understand how the fees affect donations, let’s talk about maximizing donations by choosing suggested donation amounts!
Simply put, the lower the donation amount, the bigger impact that the fees have on the donation. We do not recommend starting lower than $5 to ensure you’re minimizing the effective rate charged per donation. There’s more than just processing fees to think about when choosing these amounts – it’s a bit of psychology with your supporters. Your organization knows better than the supporter what donation amount is meaningful and will have the most impact. So by changing the suggested donation amounts, you’re helping inform the donor what you need. Since our platform makes it so simple to make changes to your Kiosk configuration, you can experiment with these amounts to find the perfect balance of asking for what you need and what your donors are most comfortable contributing!
Back to credit card fees, check out the graphics below to better understand card present and card not present donations and how the effective rate changes.
After reviewing these charts, our team recommends setting your suggested donation amounts between $10 – $100 for everyday use. If you’re taking your Kiosk(s) to a higher end event, don’t be afraid to increase those amounts!
What about Donor Covered Fees?
It’s become more of an accepted trend that donors are asked to cover the transaction fees associated with their donation – and every donor using your Kiosk is asked if they’d like to cover those for your organization! If they choose to cover the fees, they will see the total amount they’ll be charged while your organization gets the full intended donation.
Based on our current customer usage and data, we’ve determined that 80% of donors choose to cover the transaction fees. If 20 supporters each make $25 donations and 80% of them choose to cover the processing fees (so, 16 supporters), the effective rate decreases so the fees have less impact on your fundraising.
Total Gross Donations: 20 x $25 = $500
- 80% of 20 supports cover the card present processing fees (Stripe’s 2.7% + $0.05 and Kind Kiosk’s 3%)
- 4 supporters do not cover the fee, meaning your organization does
The 16 supports covering the fees pay the 5.9% effective rate, so they’re charged $26.57. Your organization gets the full intended $25.
Your organization covers the fees for 4 donors, so your net donation of each $25 donation is $23.53. In total, you receive $23.53 x 4 = $94.12.
So:
- 16 fee-covered donations = $400
- 4 non-fee covered donations = $94.12
- TOTAL NET DONATION: $494.12
This math really helps to show how impactful it is when your supporters choose to cover the transaction fees associated with their donations! That’s why we designed the donation workflow to toggle donor covered fees “on”, encouraging the donors to cover those fees – otherwise they would toggle it off.
We hope that this blog helps you understand credit card processing fees, how they affect fundraising, and what you can do to minimize that affect! Of course, if you have any questions, our team is always here to help.