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Published January 22, 2024
The background into “FREE” fundraising platform tip models
In the last couple of years, a lot of companies have created a “free” fundraising platform to help schools and teams raise money via crowdfunding. But wait a second, these are for-profit businesses. So how are they making money?….. They are charging the donors an optional “Tip” at checkout to support the fundraiser, or the kids involved.
Are these business tactics sneaky and deceptive?
Free fundraising platforms would argue that they are very transparent and “FREE”. But if you look at their websites and marketing, that is far from the truth. They like saying things like “We pride ourselves on being a fee-free way for schools to fundraise. You keep 100% of the money raised” or “We appreciate the trust educators place in us and are committed to operating with transparency and integrity”. But they don’t say anything about charging the supporters a high default tip on their front facing website! Some don’t even say anything in their privacy policy or terms and conditions. They don’t let teachers, coaches, or administrators know that they are charging this optional tip to their supporters. So, I will leave it for you to decide if these companies are being deceptive and sneaky or if they are being fully transparent.
These companies are charging a default tip as high as 20%!!! The tip can be adjusted down to zero if the supporter doesn’t want to pay it, but it is very subtle and clearly missed by a large portion of donors. Since the majority of supporters are not seeing this option tip section, they are even less likely to know it can be adjusted, and 20% is a pretty high “tip” to pay when you are just trying to support a local school or sports team. In most cases, the supporter has to click 3 to 4 things before they can take away the tip. Some of these school fundraisers are very desperate and personal. Finding out as a donor that you have been charged extra without realizing it and that the school doesn’t get any of the tip money, can be incredibly upsetting.
What are the benefits of charging fundraisers vs. supporters?
We understand neither donors nor fundraisers like fees, but almost all crowdfunding platforms are for-profit businesses. They allow schools to use their site, features, payment processors, customer support, fundraising coaches, and more. This all would not be possible without fees. So, which is better, charging fundraisers or supporters? We listed some benefits of not charging a donor a high option default tip below:
You are making donating as cheap as possible for your donors.
You are not upsetting donors when they discover they are paying fees to make a donation.
You are not risking donors reducing the amount they are donating to compensate for fees.
You are not risking donors abandoning your campaign in protest of fees.
Donors who have had a great experience donating are more likely to donate again.
Donors who have had a great experience donating are more likely to share your campaign with others and encourage them to donate too!
Conclusion
We think it is important for fundraising companies to be ethical and transparent about their fees whether it is a charge to the fundraiser or to the donor. Especially when charging the donor as it is a variable fee and can be a lot more than a flat fee upfront. From feedback we received, supporters do not believe it is acceptable to charge them for the privilege of donating. Is it really fair to ask them to pay a fee, sorry, a tip, just to be able to donate? And most importantly, do you really want to do anything that may make your donors decide against donating?
Tipping is usually a result of good customer service. The “free” fundraiser platforms do not have real customer service but simply an email address to reach out to. This most certainly does not justify the preloaded 20% tip. By not providing a representative to launch the fundraiser, these companies are placing a bigger burden on the coaching staff. Placing a larger burden on the coaching staff, and then asking for a tip, is anything but transparent and is not in the best interest of the program. Vertical Raise does not boast being the cheapest option. But we do boast being what is best for the coaches, players, and the program. These “tip” option companies are cutting corners and will end up hurting these programs. Vertical Raise’s mission is to provide safe and effective fundraisers across the country and we will continue to do so, without cutting corners.