The Hidden Cost of Online Giving: Understanding Platform Fees in 2026
By Mark Becker, Founding Partner, Cathexis Partners, with contributions from Erin Peshoff, Chief Curator at Vivia Studios
For years, nonprofit organizations evaluated online fundraising platforms based on features, usability, integration capabilities, and payment processing rates. Most of us became familiar with the standard conversation around credit card processing fees. Depending on the provider, organizations could expect to pay roughly 2.2% to 3.0% plus a per-transaction fee for online gifts.
Recently, however, a new category of fees has become increasingly common: platform fees.
The latest example comes from Blackbaud, which announced that beginning July 1, 2026, many online donations processed through Blackbaud Raiser’s Edge NXT forms will incur a new 1.5% Online Form Platform Fee, while transactions processed through NetCommunity and Online Express forms will incur a 2.0% Online Form Platform Fee. These fees are separate from payment processing costs and annual subscription fees and are intended to support ongoing investment in the platform and online giving infrastructure.
Click Here to download the Platform Fee Matrix
For fundraisers, the conversation cannot stop at the balance sheet. Platform fees do not just change what an organization nets on a $100 gift. They influence every decision that sits upstream of that transaction, from how the ask is framed and how the donation form is designed to whether the organization has been honest with itself about what it is asking donors to absorb.
Whether you agree or disagree with Blackbaud’s decision is almost beside the point. The larger question nonprofit leaders should be asking is simple:
Do we truly understand what it costs to process a $100 online donation?
Processing Fees Are No Longer the Whole Story
Historically, organizations focused primarily on payment processing rates. A donor gives $100, the payment processor takes approximately $2.50 to $3.50, and the nonprofit receives the balance. Simple.
Today, the calculation is often much more complicated.
Depending on the platform, a single online gift may involve:
- Payment processing fees
- Platform fees
- Subscription costs
- CRM licensing fees
- Gateway fees
- Digital wallet fees
- Donor-covered fee programs
- ACH processing costs
Some vendors bundle these costs together while others separate them. Some disclose them publicly, while others require a sales conversation before pricing is available. As a result, two platforms with similar processing rates may produce dramatically different economics for the nonprofit.
The challenge is that many organizations negotiate hard on software subscription costs while paying relatively little attention to transaction economics. Yet for nonprofits processing millions of dollars annually through online channels, even a one-percent difference in effective transaction costs can represent tens of thousands of dollars per year. Fee transparency is no longer an operational detail. It is a strategic issue.
The Donor Cover Myth
Whenever platform fees become a topic of conversation, a familiar response quickly appears:
“Our donor cover feature offsets those fees.”
There is certainly some truth to that statement. Many fundraising platforms now allow donors to voluntarily add an extra amount to help cover transaction costs. Some vendors report high participation rates, and these programs can generate meaningful revenue.
However, nonprofit leaders should be careful not to assume that donor cover automatically eliminates platform costs.
The reality is far more nuanced. Not every donor chooses to cover fees, some donors reduce their gift amount when presented with the option, and participation rates vary significantly based on audience, gift size, campaign type, and form design. Even when donors elect to cover fees, that does not necessarily mean the entire cost of processing the transaction is covered.
For example, Neon One states in its pricing materials:
“Maximize your impact and reduce transaction costs with Neon Pay’s donor-covered fees option. Organizations that use this option often see lower processing rates, typically between 1% and 1.5%.”
Notice the wording. The fees are reduced, not eliminated.
Similarly, Virtuous publishes a formula used to calculate donor-covered fees. While the formula allows organizations to recover some or all of the underlying payment processing expense, the actual outcome depends on participation rates, processing costs, and transaction types. Like many donor-cover programs, the results can vary significantly from organization to organization.
Blackbaud offers three different approaches: Complete Cover, Donor Cover, and My Organization Pays.
Under Complete Cover, Blackbaud covers the payment processing fees and gives donors the option to contribute additional funds to support the service. Under Donor Cover, the organization still pays Blackbaud Merchant Services fees, but donors are asked to increase their contribution amount to offset those costs. Under My Organization Pays, the donor sees no additional ask and the organization absorbs all transaction costs.
Blackbaud’s own examples illustrate how complicated these calculations can become. A donor may pay more than the original gift amount, yet the organization’s net revenue still depends on the underlying fee structure. The key takeaway is that donor-cover programs are not magic. They are cost-sharing mechanisms, and their effectiveness depends heavily on donor participation and the platform’s pricing model.
There is also a relationship cost that rarely shows up in a revenue calculation. When an organization deploys a donor-cover prompt without fully understanding its own fee structure, it is effectively asking donors to solve a problem that has not been clearly defined internally. Donors feel this in their giving experience, even if they cannot articulate exactly why.
At the end of the day, online giving is part of the donor relationship. Organizations that have spent years cultivating donors through personal outreach, stewardship, and trust-building are making a very different kind of ask when those same donors encounter a checkout experience that suddenly feels transactional.
The result is that donor-cover programs often reduce the effective cost of fundraising, but they rarely eliminate it entirely. Organizations evaluating technology investments should ask vendors for actual net results rather than theoretical maximums.
A better question is:
After all donor-cover participation is accounted for, what percentage of online revenue does the organization actually retain?
Transparency Matters
One of the most interesting findings from my review of fundraising platforms was not the actual fee levels themselves. It was the enormous variation in pricing transparency.
Some vendors publish detailed processing schedules and fee structures. Others provide only partial information. Many enterprise platforms rely almost entirely on custom pricing models.
None of these approaches are inherently wrong. Large organizations often require customized agreements, and enterprise pricing is common throughout the software industry. However, it does make meaningful comparisons much more difficult.
When evaluating fundraising technology, nonprofit leaders should ask for a complete picture that includes:
- Subscription costs
- Platform fees
- Payment processing fees
- ACH fees
- Digital wallet support
- Donor-covered fee participation rates
- Contract minimums
- Implementation costs
Without that information, it becomes nearly impossible to calculate the true cost of online fundraising.
Focus on Net Revenue, Not Fee Percentages
A common mistake during software evaluations is focusing exclusively on fee percentages. A platform with slightly higher fees may still produce more net revenue if it increases conversion rates, improves recurring giving performance, or creates a better donor experience.
Likewise, a platform with lower published fees may ultimately cost more once subscription costs, platform fees, implementation expenses, and payment processing costs are taken into account.
The goal is not necessarily to find the cheapest platform. The goal is to maximize mission revenue. That requires looking beyond individual fee categories and understanding the complete economics of the fundraising technology ecosystem supporting your donors.
Questions Every Nonprofit Should Ask
As fundraising technology continues to evolve, every nonprofit should be able to answer the following questions:
- What does it actually cost us to process a $100 online donation?
- How much of our online revenue is consumed by platform and processing fees?
- What percentage of donors participate in donor-cover programs?
- How much revenue do we retain after all fees are applied?
- Are our current fees clearly disclosed and understood internally?
- What does this giving experience signal to a first-time donor, and is it consistent with how we steward relationships everywhere else?
- Do the people responsible for donor relationships understand the full cost structure of the platforms they are sending donors to?
In many organizations, no single person holds both the cost picture and the relationship picture at once. The platform review is often a finance and technology conversation, while the donor experience discussion belongs to fundraising. When those conversations happen separately, the cost is paid in retention rather than invoices.
If you cannot answer those questions today, now may be a good time to start.
Because in 2026, understanding online fundraising costs requires looking beyond payment processing and examining the entire technology stack behind every donation.
Click below to access the side-by-side Platform Fee Matrix and compare how leading fundraising platforms approach processing fees, platform fees, donor-cover programs, and transparency.
Click Here to download the Platform Fee Matrix
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Is your organization struggling with disconnected systems, unreliable reporting or uncertainty about whether to replace its CRM? Cathexis Partners helps nonprofits assess their technology environment, improve business processes and select platforms based on documented organizational needs. Contact us to discuss your next step.
