Two pricing models dominate nonprofit donation platforms today, and they produce meaningfully different outcomes even when the marketing around both sounds similarly reassuring. One asks donors to voluntarily cover the platform's costs. The other charges the nonprofit a percentage or subscription directly. Neither is inherently better but they distribute cost differently, and it's worth understanding exactly how before picking a platform based on either one's headline pitch.
At a glance
The donor-tipping model, in plain terms
Under this model,used by platforms like Zeffy and Raisely's free Core plan, the nonprofit isn't charged a platform fee, while the platform uses optional donor contributions to help cover its operating and payment-processing costs.. Instead, donors are shown an optional, adjustable prompt at checkout inviting them to add a small amount on top of their gift, specifically to support the platform. Enough donors accept the prompt, across enough organizations, to fund the platform's operating costs and cover the payment processing fees on the nonprofit's behalf. Whether a specific donor tips or not, the organization still receives the full donation amount.
The practical effect: the nonprofit's side of the ledger shows zero fee deductions, full stop. The cost exists, but it's carried by donors who opt in, not subtracted from what the organization raises.
The platform-fee model, in plain terms
Under the more traditional model used by platforms like Donorbox on its Standard plan , the platform charges a percentage of each donation directly to the nonprofit, on top of standard payment processing costs. Donorbox's Standard plan, for example, starts at a 2.95% platform fee, reducible to as low as 1.6% by paying a $150/month subscription for the Premium plan. There's no donor-facing prompt at checkout; the donor's payment experience stays simple and uninterrupted, but the cost is absorbed directly by the nonprofit, deducted from what it actually raises.
Running the same $50,000 through both models
For simplicity, this example isolates the platform fee and does not include payment-processing costs, which vary by payment method and provider.
A nonprofit raising $50,000 a year in online donations sees a meaningfully different outcome depending on which model it's on. Under a 2.95% platform-fee model, roughly $1,475 goes to the platform before processing costs are even added ,money that never reaches a program budget, deducted automatically and invisibly from the organization's total. Under a donor-tipping model, that same $50,000 arrives intact; whatever donors choose to tip exists entirely outside that number, funded by donors who opted in rather than subtracted from what the nonprofit raised.
On pure numbers, the tipping model looks like a clear win for the nonprofit. The fuller picture is less one-sided than that comparison alone suggests.
Payment-processing costs are excluded from this simplified comparison.
The dollar math favors the tipping model in isolation, but it isn't the only factor worth weighing:
• Donor experience , the tipping model adds a checkout step that some donors, particularly those less familiar with the pattern, may find mildly friction-inducing, even though most don't opt out entirely
• Feature and customization depth , platforms funding themselves through tips have historically offered less page customization and lighter CRM tooling than some fee-charging alternatives, a pattern covered in more depth in our Zeffy and Raisely comparisons
• Predictability , a platform fee is a known, fixed percentage a nonprofit can budget around precisely; donor tip revenue funding a platform's operations is, from the platform's side, less predictable, which can show up indirectly in how much a free platform can invest in support, security, or new features over time
None of this means the tipping model is worse , it means the $50,000 comparison above is real and worth taking seriously, but it isn't the entire decision by itself.
A third path: transparent pass-through
A less common third model exists alongside these two: no platform fee charged to the nonprofit, and no donor-facing tip prompt either, with the actual payment-processing cost passed through to the nonprofit directly and transparently, at cost, with no markup added on top. This avoids the donor-facing friction of the tipping model while still keeping the nonprofit's platform-fee line at zero , the tradeoff shifts to the nonprofit absorbing the real processing cost directly, rather than either donors or a platform-fee percentage covering it.
Which model is “better” depends on what you're optimizing for
( Also read to compare price between different models)
Donor pays → tipping model
Nonprofit pays → platform-fee model
Nonprofit transparently absorbs processing → pass-through model
A nonprofit that wants the simplest possible donor checkout experience, with cost predictability that doesn't depend on donor generosity, may lean toward accepting a transparent platform fee as a known, budgetable cost. A nonprofit for whom every percentage point matters most, and whose donor base is comfortable with a brief optional prompt, is likely to come out ahead financially on a donor-tipping model. Neither preference is wrong , they're different answers to a real tradeoff, not a case where one model is objectively correct and the other is a mistake.
Choose a fundraising model that makes the cost clear
The way a fundraising platform gets paid matters. Whether the cost is covered by donors, deducted from nonprofit revenue, or passed through transparently, your organization should know exactly what happens to every dollar before choosing a platform.
Givelayer is building a fundraising platform around straightforward pricing and a lower-friction experience for nonprofits and their donors.
FAQ
What's the difference between a donor-tipping model and a platform fee?
A donor-tipping model funds the platform through optional contributions donors add at checkout, with the nonprofit's donation amount not reduced by a platform fee. A platform fee is a percentage or subscription charged directly to the nonprofit, deducted from what it raises.
Which model results in the nonprofit keeping more money?
On pure dollar math, the donor-tipping model typically results in the nonprofit keeping more, since no percentage is deducted from the donation itself. However, other factors : page customization, CRM depth, and donor checkout experience can offset that advantage depending on the organization's specific needs.
Do donors have to pay the tip in a donor-tipping model?
No , the tip prompt is optional and adjustable. Donors can increase it, decrease it, or remove it entirely, and the nonprofit still receives the full donation amount regardless of what the donor chooses.
SA
Samson Orobowale
Writing about fundraising, donation technology, and the future of giving at Givelayer.
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