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Donating by credit card, the usual way
Giving by card on a charity's website is quick and earns you rewards. The catch is the processing fee: about 3% of every gift. Either the charity loses it, or you're asked to add it on top.
When you donate by credit card the usual way, about 3% of the gift goes to processing fees: roughly $300 on a $10,000 donation. Either the charity loses it or you're asked to add it. Smart Generosity teaches a way to give by card where nothing is taken out of the donation, you pay no fees, and you still earn your card rewards.
Where the 3% goes
When you give by card, the charity pays the same kind of processing fee a store pays: usually around 2% to 3.5% of the gift, sometimes plus a small fixed amount. On a $10,000 gift that's roughly $300 that never reaches the cause. Many donation forms now ask you to "cover the fees" so the charity is made whole, which means the $300 comes from you instead.
The fees repeat on every gift. Split $25,000 across five charities and you pay them five times.
What's good about it
- Rewards. Your card earns its normal points, miles or cash back.
- Fast and easy. A few minutes online, and you get an emailed receipt.
Side by side
| Card, usual way | Smart Generosity | |
|---|---|---|
| On a $10,000 gift, the charity receives | About $9,700 | $10,000 |
| Fees | About 3%, lost by the charity or added by you | None |
| You earn | Your card's rewards | Your card's rewards |
| Several charities | A separate checkout, and fee, for each | One platform for every charity |
| Receipts | One from each charity | An official receipt for every gift, in one place |
Fee rates vary by charity and processor; 3% is a typical average. Your charitable deduction is the same whether you give by cash, check or card, and points don't reduce it. Ask your tax preparer how much you can deduct.
The bottom line
Giving by card is a great habit: you were going to give the money anyway, so you may as well earn rewards on it, as long as you pay the balance in full. The only problem is the fee. Smart Generosity keeps everything good about card giving and takes the fee out of the picture, so the charity receives 100% and you keep your rewards.
Common questions
Do charities pay credit card fees on donations?
Yes. When you donate by card the usual way, the charity pays a processing fee of roughly 2% to 3.5% of the gift, about $300 on $10,000. Many donation forms ask the donor to add that amount instead.
Should I cover the fees when donating by credit card?
Covering the fees makes the charity whole, but it means you pay about 3% extra on every gift. With Smart Generosity the fees are covered by a third party, so you don't have to choose between the charity and your own wallet.
Can I donate by credit card without the charity losing money?
Yes. Smart Generosity members give by credit card to any U.S. 501(c)(3) charity with nothing taken out of the donation, so 100% reaches the charity, and they keep their card's points, miles or cash back.
Give all of it to the causes you chose.
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