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Benevity fees

  • 1.  Benevity fees

    Posted 07-11-2023 01:23 PM
    For those of you who receive gifts from Benevity, do you credit the gross amount as a gift?  Or do you give donor credit for the net amount which subtracts the merchant fee?
    Thanks
    Tina

    Tina Gorski-Strong, P '23 (she/her/hers)
    Chief Advancement Officer
    Bancroft School
    508.854.9201
    Pronouns: she, her, hers

    Please make your gift by June 30!
    Every Donor Counts!

    "Some people are never going to clap for you. Win anyway."

     
    Bancroft School
    110 Shore Dr, Worcester, MA 01605
    T: 508-853-2640 | F: 508-853-7824
    www.bancroftschool.org



  • 2.  RE: Benevity fees

    Posted 07-11-2023 01:28 PM
    Many will give hard credit only for the amount received (which is all you can count for VSE purposes), but give recognition credit for the full amount.

    John

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard





  • 3.  RE: Benevity fees

    Posted 12 days ago

    John,

    Did/does this method you cite (hard credit net, soft credit gross) get accompanied by a write-off of the fees?

    Your response is greatly appreciated.

    Stephen Lambert



    ------------------------------
    Stephen Lambert
    Susquehanna University
    lamberts@SUSQU.EDU
    ------------------------------



  • 4.  RE: Benevity fees

    Posted 12 days ago
    What fees, Stephen? And what write-off?

    John

    John H. Taylor
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard





  • 5.  RE: Benevity fees

    Posted 12 days ago
    The soft credit is often for the gross amount; hard is for net.

    John H. Taylor
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard





  • 6.  RE: Benevity fees

    Posted 12 days ago

    Apologies for the lack of clarity, John. I made an assumption about the message platform showing your 2023 response to the Benevity fee post along side my question.

    So, Benevity fees. I value your hard/soft input. Let's examine the hard credit for the net amount of the donation. Will you comment on what you've seen/know in regards to the Benevity fee amount being a write off on our financial ledger at our institutions? Is this fee write off advisable? Is this best-practice? Do we look at it as, say, credit card fees? Do we just disregard the fees? 



    ------------------------------
    Stephen Lambert
    Susquehanna University
    lamberts@SUSQU.EDU
    ------------------------------



  • 7.  RE: Benevity fees

    Posted 12 days ago
    There is nothing to write off, Stephen.

    A donor cannot make a pledge that anticipates a payment from a DAF. Therefore, there should not be a pledge on your general ledger to write off.

    You must write off the entire pledge if you erroneously recorded a pledge, not knowing the donor would pay through a DAF (Benevity). Then, it is up to you whether you want to pursue the difference between what was anticipated and what was received directly from the individual.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987







  • 8.  RE: Benevity fees

    Posted 12 days ago

    Hi Stephen,

    My two cents is that we never hard credit for more money than we receive. This differentiates it from credit card gifts where we receive the full amount and pay a few based on what we negotiated with the credit card companies. In my opinion, once you open the door to recording full amounts including fees that you did not negotiate, or directly pay, you could invite shady practices that could violate the spirit of philanthropy.

     

    Based on past discussions, I think there are plenty of orgs handling these each way and I have seen consultants advocate both approaches. It would be hard to say what is the most common. Regarding write-offs, it might be helpful to clarify if you are using this term in a fundraising system context (i.e. pledges) or a General Ledger context to mean the same as "expensing them."

     

    Best,

     

    John Smilde

    Director of Gifts and Records Administration

    Advancement and Alumni Relations

    George Mason University

    4400 University Drive, MSN 1A3

    Fairfax, VA 22030

    703.993.8680

    jsmilde@gmu.edu

     

    This electronic message contains confidential information which is, in whole or in part,

    subject to exclusion from disclosure under the Freedom of Information Act pursuant to

    §2.2-3705.4.7. of the Code of Virginia.

     

     

     

     

     






  • 9.  RE: Benevity fees

    Posted 12 days ago

    "and pay a few" s/b "and pay a fee"

     






  • 10.  RE: Benevity fees

    Posted 12 days ago

    Thank you, John. These details are very helpful.

    SL



    ------------------------------
    Stephen Lambert
    Susquehanna University
    lamberts@SUSQU.EDU
    ------------------------------



  • 11.  RE: Benevity fees

    Posted 10 days ago
    I want to triple underline and put in bold John's important comment that " In my opinion, once you open the door to recording full amounts including fees that you did not negotiate, or directly pay, you could invite shady practices that could violate the spirit of philanthropy."

    The Benevities of the world want charitable organizations to tell donors that the full amount of the donor's gift to Benevity reached the charity when in fact, Benevity's fee went to Benevity and the charity had no control over the assessment of that fee or its size. If Benevity is a service to the donor, the donor can't expect to get credit from the charity for the fees incurred for their own convenience. If it is a service to the charity, the fee should be based on an arms-length negotiation between Benevity and the charity, like a credit card processor.

    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:







  • 12.  RE: Benevity fees

    Posted 10 days ago

    Thank you for your response!

    SL



    ------------------------------
    Stephen Lambert
    Susquehanna University
    lamberts@SUSQU.EDU
    ------------------------------



  • 13.  RE: Benevity fees

    Posted 10 days ago

    No one has ever explained to me why it's a great leap forward in human progress that Benevity and its ilk have come into being, but perhaps there are good reasons, and if I knew those reasons I might have warmer feelings toward them.

    Isaac and John make fair points, about the fees on giving through such organizations being out of the control of the ultimate recipients, and about the lack of transparency in such intermediaries like Benevity wanting the ultimate recipient to treat the gift as its original, pre-fee amount.  And it is often the case that we treat our own credit card fees and such as expenses that don't reduce the amount of the gift that goes to fund the intended purpose of the gift.  All true.

    However.

    I wonder how it comes across to our donor when they in good faith make, say, a $1,000 gift through Benevity and then don't appear in the $1,000 donor listing because we only credit the $970 (or whatever) net.  When we thank our donors, do we thank them from the gift of $970 that we received from Benevity, and do we explain why?  Be interesting to hear the range of practices.

    Isaac's comment "If Benevity is a service to the donor..." is interesting.  Has anyone taken a serious look at why individual donors contribute through Benevity?  Is it the convenience of their portal?  Do we know whether donors who give through Benevity give more or less than similarly-situated donors who don't?

    If I understand correctly, some portion of Benevity's business model is managing employee giving programs for corporations.  It's not hard for me to imagine that corporations would be happy to outsource that work.  In the absence of a Benevity, would the likely result be that companies would run those programs in-house, as in the olden times, or that they might just discontinue employee giving programs altogether, and, if the latter, would we think that would be a good thing or a bad thing?  In any case, the employee who makes that $1,000 contribution through their workplace giving program is at least a couple steps removed from the decision-making that results in us ultimately receiving the net reduced by the fees charged by the intermediary chosen by their employer.  Also, it may worth keeping in mind that giving through the channel that their employer created might be the only way that we also get the nice employer match (minus fees, of course).

    I'm wondering whether any among us have done a full communication with our donors, explaining that if they give directly to us more/all of their gift supports the mission of the organization, and perhaps that we can't provide member benefits if they give through a Benevity.  If so, what were the results?  If not, why not?  Because that's not a message that we want to prioritize?  

    From a back-office perspective, I can see the logic of only crediting the amount that we actually receive, and I understand how getting a net of someone else's fees results in less control and is different from an accounting perspective than crediting the full amount and expensing the fees from our contracted payment provider (which is, after all, another third, albeit one working for us).  I empathize with the motivation to "hold the line."  I certainly empathize with the difficulty and time involved trying to infer the portion of an aggregated check that should be attributed to a particular donor, esp. given what sometimes seems like a Byzantine and variable fee structure.

    But I wonder whether this looks different from the donor's point of view, for people who aren't so steeped in the "inside baseball" of the matter.  We know what we'd like the donor to do, presumably, which is give to us directly (well, unless they're giving through an employee giving program and we also get a match, or...).  But does crediting the net actually incentivize that?  One hopes that it's not just irritating our supporters.

    Lots of questions today.

    My US$0.02 worth; the usual disclaimers apply.

     

    Thanks,

    Alan

     

    Alan S. Hejnal (he/him)

    Data Quality Manager

     

    SNAGHTML5cbfa34

     

    Office of Advancement

    600 Maryland Ave SW Ste 600E

    PO Box 37012, MRC 527

    Washington, DC 20013-7012

    (202-633-8754 *HejnalA@si.edu

     

     






  • 14.  RE: Benevity fees

    Posted 12 days ago

    Another poster appropriately pointed out my poor choice of words. When I said "write-off" I was trying to refer to a General Ledger context and the same as "expensing" the fees. I did not mean it in the fundraising/pledge context. Sorry about that. 



    ------------------------------
    Stephen Lambert
    Susquehanna University
    lamberts@SUSQU.EDU
    ------------------------------



  • 15.  RE: Benevity fees

    Posted 12 days ago
    As you are not paying the fee (Benevity is subtracting the fee from the donor's contribution as a service to them, not a service to you), I do not see an expense to be carried on your books.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987







  • 16.  RE: Benevity fees

    Posted 07-13-2023 07:31 AM
    We credit the donor with the gross contribution amount.  Development has a budget line for credit card fees and Accounting tracks those totals. 

    Hope this helps!

    Martha Lauria, MBA
    Director of Development Operations
    NAACP-Legal Defense Fund (LDF) 

    Martha Lauria





  • 17.  RE: Benevity fees

    Posted 12 days ago

    Martha,

    Thank you for posting a response! It's very helpful to me. 

    May I ask, do you get the impression that your method is very widespread? Would you estimate that perhaps the majority of shops do this?

    Gratefully,

    Stephen Lambert



    ------------------------------
    Stephen Lambert
    Susquehanna University
    lamberts@SUSQU.EDU
    ------------------------------