Customers in the United States have the option to allow donors to cover the processing fees for their online donations. When enabled, donors can see the processing fee and choose to cover it by slightly increasing the amount of their donation.
ACH donations have no % fee. Each ACH transfer is charged a flat fee of $0.30.
Enabling Cover the Fee saves your church money in fees, and the amount covered by the donor is usually small relative to the size of their donation.
Though this feature works for most churches, if your church has many donations being passed through the church to another organization, covering the fee might not work for your church.
Here's an example of why you might not want to enable Cover the Fee: If a donor wants to give $100 to a missions organization through the church, and they cover the fee of 30¢ (ACH), their year-end tax statement will show that they gave $100.30 to that missions organization.
This means your church pays 30¢ of the total amount to Stripe as a processing fee, receiving $100 after fees. Your church has to either give the missions organization the $100 they received after fees (which won’t match the donor’s statement) or give $100.30 to the missions organization, requiring your church to reconcile the additional 30¢ after processing fees.
From the Settings tab on the Manage page, check the box next to Give donors the opportunity to cover the processing fee on the donation form.
Cover the Fee is only available to customers in the United States. If your account is based in Canada, you will not see this option in your account settings.
A donation where the donor covers the fee means it’s a slightly more generous donation. So the donation is not represented differently in the Stripe Payout reports, and there’s no change in your bookkeeping process.
Though processing fees will still be charged to every online donation, the amount after fees is deposited to your church's bank account will equal the amount the donor initially intended to give.
For example, if a donor decides to cover the fee and bump a $200 credit card donation to $204.70, the amount they’ll see in their receipt and donor statement is $204.70, and the church will receive $200. Stripe will receive the $4.70 fee.
In the formula below, the net is what actually ends up in the church's bank account. The gross is the transaction amount that's actually put through Stripe by the donor. With the Stripe rates we have for U.S. customers, the formula is as follows:
gross = (net + .3) / (1 - .0215)
So if a donor wants the church to net $200, we can now solve for gross by taking into account that the higher the gross amount is, the higher the fee will be:
gross = ($200 + .3) / .9785
gross = $204.70
So, when giving using a credit card, it takes a $204.70 donation for the church to receive $200 in their bank account.