Avoiding the hidden costs of “free” software for nonprofits.

Let’s get the self-promotion out of the way. Zeffy is the only 100% free fundraising platform for nonprofits that is actually free.

There are a lot of fundraising and nonprofit event ticketing platforms out there that claim to be “free”. And, to a certain extent, they are. Sites like Givebutter, GoFundMe and RallyUp (to name a few) may not charge platform fees for some of their event registration software and online ticket sales for nonprofits, but they charge platform fees for some of their more useful tools and they pass on the transaction fees from online ticket sales to the nonprofit or tack on a mandatory fee for donors.

Zeffy is actually free. When you’re raising money for your cause, you want every penny of every donation to go towards what really matters: your mission. We don’t charge platform fees and we cover 100% of your transaction fees. So, how do we cover the costs of our services? We ask your donors for a voluntary contribution. The key word here is: voluntary.

Supporters value fundraising transparency.¹ They like to know that their donations are helping your nonprofit make a real difference—not going towards avoidable and unnecessary expenses like transaction fees (sometimes called third-party fees). So, we try to be as transparent as we can (and we’re always improving on this) so that your donors and understand the costs associated with online ticket sales and donations.

Educating nonprofits, their donors and supporters on the costs and realities associated with fundraising is an important for Zeffy and your nonprofit. (You wouldn’t randomly ask someone for money without first explaining why you’re asking for it.)

So, let’s start by talking about hidden fundraising fees and how to identify them.

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How to identify hidden fundraising fees:

You might think that researching and deciding on a free nonprofit fundraising platform is pretty straightforward. And we can’t blame you—a quick Google search brings up over 1.5 million results and an awful of them claim to be “free”.

So how do you choose? Maybe you look at a few fundraising platforms for nonprofits that you’ve heard of before or you choose one with branding that you like. You might even dig a deeper and look at the products, services and tools they offer or their business model (Are they a BCorp? Do they give back?). But, eventually you will come across their pricing model and realize that there are a few different types of hidden fees out there that are ready and waiting to influence your decision.

Platform fees:

Platform fees vary depending on the service you choose. When it comes to nonprofit event management, ticketing and fundraising platforms, they are usually 1% to 5% of the donation or ticket price, most fundraising software requires nonprofits to pay a platform fee for access to some or all of their services. ‍‍(‍‍W‍‍i‍‍t‍‍h‍‍ ‍‍t‍‍h‍‍e‍‍ ‍‍e‍‍x‍‍c‍‍e‍‍p‍‍t‍‍i‍‍o‍‍n‍‍ ‍‍o‍‍f‍‍ ‍‍Z‍‍e‍‍f‍‍f‍‍y‍‍’s‍‍ fundraising platform which is completely free.‍‍) ‍‍

Transaction fees:

Transaction fees cost nonprofits around $2 billion in 2021. That’s a lot of money that could have been invested a lot of nonprofits. Starting at around 2.2% of the donation or ticket price with an additional $0.20 to $0.30 charge and going as high as 2.9% with an additional $0.20 to $0.30 charge, every nonprofit event management, ticketing and fundraising platform passes the transaction fees onto the nonprofit—except Zeffy.

For example, check out Paypal's nonprofit donation fees here.

Monthly or yearly fees:

Some fundraising platform providers may require users to pay a monthly or yearly fee in to access all of the available products, services and tools.

Read the fine print.

When it comes to figuring out the real cost of the fundraising and ticketing platform for your nonprofit, it’s helpful to read the fine print.

We’re here to help with a breakdown of a few of the most popular nonprofit fundraising platforms that claim to be “100% free”:

• GoFundMe
• RallyUp
• Givebutter
• Raisely
• Give lively
• Facebook for donations

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GoFundMe

Like Zeffy, GoFundMe relies on “tips” collected from donors so they can offer a 0% platform fee to nonprofit organizations. Similar to Zeffy, donors can choose to add a tip that’s anywhere between 0% and 30% of the donation.

Unlike Zeffy, however, GoFundMe also passes the transaction fees charged by it’s third-party merchant service provider on to the nonprofits. Despite their claims to rely solely on the generosity of donors to offer their platform free of charge, GoFundMe actually deducts the transaction fee of 2.9% + $0.30 from each donation, in addition to accepting tips.

Verdict: Not really 100% free.

When a fundraising software provider claims to offer their service free of charge thanks to tips from donors, they shouldn’t be deducting additional transaction fees from every donation.

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RallyUp

RallyUp claims to offer a “free forever” option, alongside a $25/month plan, as well as a $250/month plan. With features like events & ticketing, crowdfunding, and peer-to-peer communication, the “free forever” seems like a good option at first glance. But… ‍

In their FAQ, RallyUp also clarifies that there is also a charge of 1.99% + $0.45 flat fee to 2.9% + $0.30 flat fee per transaction, regardless of the plan.

Verdict: Not very free.

While it is true that RallyUp offers a plan without platform or monthly fees, nonprofits are still have to pay the per donation transaction fees.

If you’re starting to notice a trend here, it’s because there is one. And, if you’re sensing another shameless Zeffy plug, you’re feeling is bang on. Zeffy is transparent and upfront about everything—it’s easy when our platform is actually 100% free. We even pay the transaction fees—financed by donors’ voluntary contributions. That means that your nonprofit gets every single dollar, which means your supporters will feel even better about the impact their contributions are making. But enough about us…

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Givebutter

No surprise here: while GiveButter claims to offer “Free Fundraising, Forever” on their website, that’s not exactly the case.

The first, obvious giveaway is the “Pricing” tab in Givebutter’s navigation bar. Click on it and you’ll be presented with two options—both of which charge fees.

Verdict: Not quite 100% free.

Givebutter’s definition of free is limited to no platform fees when the optional tips are enabled. However, they (you guessed it) still charge transaction fees, whether tipping is activated or not.

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Raisely

We’re starting to run out of ways to say that Zeffy is the only fundraising platform for nonprofits that is 100% free. And that with Zeffy, you receive every dollar your donors pledge.

But, like the others, Raisely claims to be “Free, Forever.” But, scroll down a few inches and you’ll see that that’s not exactly true.

Like GiveButter and RallyUp, Raisely’s platform also includes a transaction fee on every donation. Raisely does adjust the amount it passes onto the nonprofit based on the method of payment, but in every instance, a transaction fee is subtracted from the original donation amount.

For example, if donors choose to use their credit card for their contributions, your nonprofit will be charged 2.2% + $0.30 per transaction, and if they choose Paypal, you will be charged a transaction fee between 2.2% - 2.9%.

Verdict: Surprise, surprise: not 100% free.

Raisely makes the popular claim of being “Free, Forever”; however, they still pass on the transaction fees to the nonprofit.

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Give Lively

Next up: Give Lively.

While Give Lively claims to be free across their website, it doesn’t take much digging to uncover that they to pass along their transaction or third-party fees.

Also known as transaction fees, the third-party fees Give Lively charges are 2.9% + $0.30, per contribution (and takes a lot of digging to discover).

Verdict: Free-ish.

Give Lively is free as long as you don’t include transaction fees and other third-party fees charged by platforms they partner with. So, free-ish.

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Facebook for Donations

Facebook for Donations is actually 100% free! Nonprofits can accept donations without paying any fees. But, there are still a couple of limitations:

1. Nonprofits have to wait 90 days to collect their donations. Why? So Facebook can try earn enough interest to cover the costs of the transaction fees.‍ Which, is really pretty fair.
2. Facebook does not allow nonprofits to view their donor data or create specific fundraising forms, making it a truly one-size-fits-all model, rather than a tailored, personalized experience.

Verdict: Actually free!

While Facebook for Donations does allow nonprofit organizations to collect donations for free, donations will take a while to get to you and you won’t be able to see your donor data, which means you’ll miss out on a lot of personalization and outreach opportunities that have the potential to increase your awareness and contributions.

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There’s good news!

There is a lot of choice out there and products and services specifically designed for nonprofits are getting better and better. But, (shameless plug incoming) there is only one fundraising platform for nonprofits that doesn’t charge transaction fees on every donation, and that’s Zeffy. Despite their claims of being 100% free, every other platforms charges hidden fees. (Facebook Donations is the only exception, but their product isn’t great.)

And even though these hidden transaction fees aren’t technically from the fundraising platform provider (they’re charged by third-party payment partners), there is a 100% free option out there. What makes Zeffy different? Why are we willing to pay transaction fees for nonprofits? Well, we believe:

• Fundraising platforms should be transparent.
• “Free” should mean when a nonprofit is given $100, they should actually get $100.

So how does Zeffy offer ticketing, donations, peer-to-peer campaigns, donor management, eCommerce, and membership management for free without any transaction or third-party fees?  We are funded by voluntary contributions that donors can (but don’t have to) add in addition to their donation. This allows us to cover our overhead, 100% of a nonprofit’s transaction fees and all other third-party costs. Not bad, eh?

If you’re currently using (or considering!) any other “free” fundraising platform for nonprofits, create a Zeffy account, reach out for a chat, read some reviews.

We’re free and we always will be.