PayPal and Other Credit Card Fees
If you are not using goEmerchant and DonorSnap’s online forms, you’re probably collecting donations somewhere, whether that’s PayPal or Network for Good, Square, or the myriad of other options out there these days.
How do you track those online payments?
True accounting practices reminds us that the FEES that donors pay to online services, is Not On Them — it’s on YOU for having that service. Which means you should not attribute credit card fees to donors.
You pay your Credit Card company each month as a line-item as your expenses in QuickBooks (or whatever accounting program you use).
A Donor gave $100. They should receive credit for $100.
Data Entry is Simple:
PaymentMethod = PayPal, or the Like
Amount = Full amount of their donation
Finish the page with Appeal & Campaign, etc.
If you Need to track Fees and Net Result:
While true accounting doesn’t require (or even want) you to put the specifics on the Donor, some organizations want that, for reports down the road. These are not included in DonorSnap.
Consider adding a User Defined field:
Maintenance > Site Setup > Field & Screen Customization > User Defined > Donation Tab
Add a field for “Fees” as a “Money” type of field.
Add a field for “Net” as a “Money” type of field.
You can use a DataMinerPlatinum report to export out the total Donation, Fee, and Net, and calculate manually on your end.
*Do not use the Value Received* field for anything that pertains to online donations.
Remember that the ValueReceived field is the value THE DONOR receives as part of their donation (the Non-Tax Deductible portion of their payment… such as they donated $25 (Amount) but received a dog leash for $10 (Value Received); or they paid $100 to come to an event (Amount) but received catering and golfing for $75 (Value Received).
The Value Received is the Non-Tax Deductible portion of their donation and Does Not apply to Fees paid to a credit card company and what monies YOU received as an organization after those fees.
Please remember to contact DonorSnap at email@example.com with any questions. And with regards to best practices for Credit Card fees, talk to your Board and accountant on True accounting.