The Real Cost of Free Fundraising Software

As an organization, choosing free fundraising software may seem like a practical decision to save costs. However, you might not realize that these free platforms often rely on your hard work to generate profit for themselves, which puts unfair limitations on your organization as you work tirelessly to advance your mission.

Investing your resources and time to help fund a free fundraising platform is not sustainable or efficient. From diminishing donor trust to lowering engagement and creating a poor giving experience, the word “free” has gained a new meaning.

Let’s dive into the hidden costs of free fundraising platforms.

Free Fundraising Software is Expensive

Most free fundraising platforms promote themselves as “free” because they leverage your donors’ generosity through donor tipping and hidden fees.

One of the key issues with tipping is that it’s everywhere.

A USA Today Survey found that 48% said they’re tired of being asked to tip. For nonprofits, it’s important that every donor feels valued and impactful – not caught in a transactional tipping cycle.

What is Donor Tipping?

Unlike a Cover Costs feature, which is completely configurable by your nonprofit and directly benefits your organization, the tipping model profits the fundraising platform by prompting your donors to add a tip based on the amount donated to your organization. That money goes directly to the software provider to fund their business – not toward your mission.

Donors can sometimes be asked to add a tip of up to 30% of their donation. This means if your campaign rallies 600 people to donate $50 each, the free fundraising software provider can make up to $9,000 on just tips.

When your nonprofit disables this tipping option, a platform fee of up to 5% may be applied in addition to standard processing fees. If donors decide not to pay processing fees, then the transaction and processing costs are sometimes deducted from their full donation amount.

Ultimately, your donors will monetarily pay the price of “free” fundraising software, and in return, your organization’s revenue will be constrained.

What Donors Are Saying About “Tipping”

When you’re at a checkout and asked to tip, how often do you feel guilted into saying yes? Regardless of a “voluntary tip,” half of Americans say they often leave a tip due to social pressure rather than good service.

So, how do donors feel about being asked to tip on their donation? Here’s what they are saying:

“I thought I’d seen it all, – but of course I haven’t. I donated online to a nonprofit and a $2 tip was added to the bottom line for “Free Fundraising Technology.” – Roy L.

“I can understand the 3% fee to handle the credit card fees, but tipping 20% on a donation and then hammering you for it? Forget it, I’ll hand someone cash at the next soccer game.” – Lisa M.

“I thought the tip was going to the nonprofit and not the software, such confusing language!” – John B.

“Tipping is a total rip-off. I don’t make any of those donations anymore; I’ll find a way to directly donate to the cause.” – Hannah S.

* Gathered from public nonprofit online forums.

What Nonprofits Are Saying About “Tipping”

How do nonprofits feel about this tipping model? Let’s take a look:

“Didn’t like the automatic tipping set at either 12-15% of purchase. Some guests didn’t realize this was happening until after they purchased.” – Josh J.

“I would rather donors don’t get asked for that. So much of our world is asking for tips and extra fees.” – Angela M.

“It would be nice to have an option for the organization to cover fees and get rid of the tip box and free software advertising.” – Amitai W.

“We want the ability to pay and eliminate the optional “tip” feature. Losing donors to all the questions because it takes too long to explain the process.” – Jody M.

“The most recent occurrence was a $5,000 donation, with an automatically suggested 10% donation. The extra $500 would give pause to any donor, even one with a longstanding relationship with our organization.” – Joanna D.

* Gathered from third-party review site, G2, and public nonprofit online forums.

Limitations to the Donor Experiences

Free fundraising solutions not only affect the personal connection built between you and your donors, but they also affect their overall giving experience and the likelihood that they choose to give again.

These platforms rely on and profit from individuals not fully understanding the harm of the tipping model.

Here’s what you need to know about the effects of asking donors to tip software providers:

• Creates friction in the giving experience. Giving should be easy for donors. Asking too much of them, such as adding a 15-30% tip, can become tiring and decrease the likelihood of your supporters completing a donation.
• Sparks confusion. Encouraging donors to give to your cause and then asking them to also fund your software of choice can make them question where their money is really going.
• Damages your donor relationships. Trust is a top giving motivator for social donors, but tipping can reduce transparency in charitable giving and lead to donors questioning your methods and doubting your intentions.
• Disrupts your connection. When it matters most, tipping interrupts a donor’s connection to your mission by redirecting their attention to something outside of your organization.
• Burdens your donors with unexpected fees. Once a supporter is ready to give, asking for a tip – often 10%, 20%, or higher – can cause frustration and diminish their willingness to give generously.

By not providing the best possible experience to donors, you’re holding back the potential for greater engagement and fundraising success.

A best-in-class fundraising solution, like OneCause, helps you offer a donor experience you can be proud of.

• Frictionless giving: Provide supporters with a simple, clear donation experience that elevates, rather than distracts them from your mission.
• Accessibility to give: Make it easy for donors to contribute via a complete digital wallet and secure payment processing from anywhere, anytime.
• Engaging and interactive fundraising: Create a sense of excitement by showing real-time fundraising progress on configurable, animated scoreboards.

Investing in proven fundraising software also provides an elevated experience beyond the donation moment.

• Seamless events: Simplify check-in, reduce lines at checkout, and enable your supporters to bid, buy, and donate throughout your event, all in one place.
• Elevated auction engagement: Provide donors with a mobile-optimized view, shared cart options, and other key features that make bidding and giving easy.
• Unmatched product innovation: Meet the expectations of today’s donors by investing in technology that evolves with the latest trends in giving.

Next time you see fundraising platforms promoting their brand as “free,” take a moment to consider their actual cost. Will “free” mean sacrificing your donors’ giving experience? Will it mean risking your reputation and long-term donor relationships to fund a fundraising software company that profits from your donors’ trust? As it pertains to your donors, free fundraising software is expensive.

Limitations to Your Nonprofit’s Mission

Additionally, fundraising platforms that claim to be 100% free may not provide you with the level of software features needed to reach your fundraising goals easily and successfully. Your organization will have to allocate more time toward details that shape your event experience – details that top software providers would otherwise manage for you.

From planning and configuration to execution and reporting, your software of choice should be ready to help your team maximize your mission’s impact.

Here’s how free fundraising software could limit your efforts and potential in comparison to OneCause, which understands your nonprofit’s needs.

The best software will allow you to create a customized event page and auction experience without restrictions on certain features. User-friendly software, such as OneCause, is ready to help you and your volunteers with:

• Award-winning support: Enjoy peace of mind with the assistance of our support agents, consulting services, and onsite event managers.
• Robust AI features: Save hours with AI-generated auction and raffle descriptions, be prepared for your event with AI-driven Event Readiness, and offer personalized item recommendations to drive bids with Suggest Sort and Recommended Items.
• Customizable event and campaign sites: Make a great first impression with your donation page and easily build custom ticket packages, questions, and promo codes.
• Unlimited events: Create events in a variety of formats, in-person, hybrid, and virtual, to raise funds from anywhere.
• Engaging communication: Deepen donor relationships with automated and custom text messages. Your organization can send event-specific and year-round messages.

When choosing a software provider, ask yourself,

“Do I want to work hard so my software vendor prospers, or should I choose an annual subscription without the burden of unknown fees and reinvest those thousands of dollars into our mission?”

You’re on Your Own

One of the most expensive hidden costs of free fundraising software is not having the support you need to succeed. On the other hand, one of the greatest benefits of partnering with a proven software solution is knowing you have an award-winning support team to help you make the most of your fundraising efforts.

From start to finish, OneCause cares about your events and campaigns just as much as you do, and we provide our customers with the tools and fundraising expertise needed for success, including:

• Support Analysts
• Customer Success Managers
• Fundraising & Event Consulting
• Customer Education
• Professional Services
• On-Site Event Staff
• OneCause University

“OneCause University was helpful, and our OneCause team was awesome. They helped all along the way and went over and above to make sure our event would come off without a hitch.” – Wendy R.

It’s important to highlight that, unlike other fundraising software providers, OneCause offers its own onsite event managers to help your organization on the day of your events. They’re there every step of the way, anticipating your needs and helping to maximize your success.

“Our onsite manager was an absolute joy. She was not only knowledgeable about the platform but also assisted us in setting up our auction tables. This was above and beyond her scope of work but was greatly appreciated.” – Steven W.

Investing in a proven fundraising platform allows your team to navigate unforeseen challenges with confidence, offering tailored support that elevates your organization’s impact and drives sustainable success.

What If I Just Pay the Platform fees?

Let’s say your organization moves forward with a “free” solution but decides to turn OFF the tipping option and pay the platform fees outright.

You’ll pay more for “free” software that undermines the donor relationship, lacks essential features, and fails to offer the support needed to help you meet, even exceed, your fundraising goals.

It seems “free” doesn’t actually mean free because one way or another, your organization and donors will have to bear the cost of these platforms.

Bottom Line, Free Fundraising Software = Expensive

While “free” fundraising solutions don’t seem detrimental to your organization’s fundraising efforts, the unforeseen and expensive costs will outweigh their enticing advertising.

It’s always worth investing in your donors’ experience to ensure they’ll continue to invest in your mission. Be proud of the fundraising experience you present to your supporters and allow yourself to truly focus on strengthening and building new connections that elevate your mission. Choose OneCause.

Check out other resources to make the most of your fundraising:

• 12 Ways to Raise More with OneCause Online Fundraising: Turn loyal supporters into active fundraisers to support your cause anywhere, anytime.
• Tiptoe-ing Carefully Around Donor Tipping: Check out what nonprofit professional, T. Clay Buck, Founder & Principal of TCB Fundraising, has to say on donor tipping.
• How Operation Pay It Forward Found Record-Breaking Success with OneCause: Explore how making the switch to a better platform can unlock your organization’s fundraising potential.