International Giving: Costs, Fees, and Friction
To provide an overview of the costs, fees, and friction associated with international giving such as fiscal sponsorship, equivalency determination, and transaction fees. If possible, the total amount spent should be determined. The research will help with understanding the international giving space.
Operating Costs and Fee Structures for International Giving
- Measuring the impact of donations relies on understanding the fee structure and operational assessment, and how the amount of giving affects these costs.
- Many Donor Advised Funds (DAFs) calculate the fee structure based on the size of the gift. This can significantly affect the percentage of the donor's contribution that is given to the charity.
- CAF America starts at 5% for DAF gifts and 8% for singe gifts.
- Global Giving begins at 12% and reduced amounts are available only for larger gifts.
- Cost savings range dramatically and some DAFs offer a fixed percentage regardless of the gift's size.
- For Global Giving and CAF America, the percentage of the gift that reaches the charitable organization is dependent on the size of the overall donation. For smaller gifts, a large percentage is incurred as fees.
- A CAF America DAF donor needs to gift a minimum of $1 million to reach the one percent fee. A 5% fee applies to the first $500,000 while 3% applies to the next $500,000.
- Lower fees and operational costs mean that more of the donor's money remains as a donation to be allocated where it is needed most rather than for administrative costs.
- The approach to calculating payment processing costs has changed with time and staff time, service fees, and float costs largely affect the cost estimates.
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