I intend to donate some money to a major charity. I could donate online with a credit card, or by mail with a check. I'd like to choose the method that is less expensive for the charity, so that more of my donation can go toward their programs. But I don't have a clear sense of the costs of processing each type of transaction.

For a credit card payment, I understand the charity will have to pay a "merchant fee" to their credit card processor. I have a vague understanding that this is typically about 4% of the transacted amount, but am not sure. The card I have in mind rebates 1% of the transaction back to me, so I could increase my donation by 1% to compensate (but perhaps that card has even higher merchant fees). Also, with an online payment, I can get the receipt electronically.

For a check payment, I will incur a small expense for postage and stationary. The charity will have labor costs to open the envelope, log the payment, and take the check to the bank. Perhaps their bank also charges them to process checks, I am not sure. They will also have the expense of printing and mailing a paper receipt. I don't really have any idea how to estimate the total cost.

Since the credit card costs scale with the size of the donation, and the check costs are fixed, I assume it would be better to make small donations by credit card and large donations by check. But I don't have any idea where the break-even point is.

Data from an official source or from experience would be ideal, but even a rough estimate would be helpful.

5 Answers 5


As someone that has run a nonprofit, my 2 cents:

  1. First: thank you for giving and for being conscientious about wanting to make things as easy as possible.

  2. The best method is the one you'll actually do. If there is a chance that you will end up not donating by check because you don't have a stamp, you forget, etc. go ahead and do it online. A donation with a fee is better than an intention without one.

We had one case where a potential donor decided to give, but was so worried about the processing fee that they wanted to write a check. We followed up 3 times on the pledge, spent time following up with the pledge's connection that wanted to see if it came through, and in the end they never sent the check. Their pledge wound up costing us staff time and money as we tried to make their giving easy.

  1. If you are as likely to give, size matters. My rule of thumb is that if you are giving $1 up to about a hundred dollars, the fee (which most nonprofits can get to about 3% or 3.5%) is about the same as the added staff time opening the check, adding an extra to the deposit slip, etc. But as soon as you are giving a couple hundred dollars and especially if you are giving in the thousands, it is definitely better to do it by check. Most banks don't charge an extra deposit fee at the scale of most nonprofits, and we probably have some run to the bank happening in the next day or two.

  2. Really your thank you note should be the same whether online or by check (even though you'll get the auto-thank you online), so that time difference shouldn't really play into it.

  3. The donation will be appreciated either way. While I cringe a bit if I see a $1,500 donation come through online knowing that the check would be cheaper, that is far outweighed by the thankfulness that someone thought of us and made it happen.


This kind of questions keeps repeating itself on this site and the answer is generally it doesn't matter.

As you said yourself, there are costs either way, and these costs are comparable. Generally, merchant fees differ tremendously between the different kinds of merchants, and while gas stations and video rentals may pay up to 5% and even more, charitable organizations and community services are usually not considered as high fraud risk operation and are charged much lower fees.

Either way, paying employees, managing cash/check deposits or paying merchant fees is part of the charity operational expenses. Together with maintaining offices, postal office boxes, office supplies, postage expenses and formal stationary and envelopes needed for physical donations handling. I would guess that if the charity's majority of donations come on-line as credit card/paypal payments - check handling will be more expensive. So I suggest you take the route you consider majority of donors pay - that would be the cheapest for them to handle. I would guess, credit cards being the most convenient - would be the way to go.

  • 4
    I did search for similar questions before asking, but didn't find any - if there are some, could you give a link? Also, I have trouble believing that the costs are comparable at all scales. What if I were donating $10,000? I have to expect the credit card fees would be well over $100, and there's no way it costs that much to process a check. Feb 8, 2014 at 23:14
  • @NateEldredge you need to understand the goals. Having an option for an online credit card payment is not for $10K donations, its for accidental/small scale donors who're likely to change their minds by the time they get the pen to write a check.
    – littleadv
    Feb 9, 2014 at 0:04
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    Okay, but then I don't see how this answers my question. How do I know whether I am a "large scale" or "small scale" donor? Is it at $100? $500? $1000? Feb 9, 2014 at 1:03
  • 1
    @NateEldredge I believe that if your donation is not in scale of thousand-s of dollars, you're not a large scale donor.
    – littleadv
    Feb 9, 2014 at 1:05
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    i think if $5K+ donors cut checks the charity will b happy. Agree with littleadv, it depends on amount. The $20 checks are a killer to the charity. Feb 9, 2014 at 1:36

In the US, if it's a large donation to a tax-exempt organization (401c3 or equivalent), you may want to consider giving appreciated equities (stocks, bonds, mutual fund shares which are now worth more than you paid for them).

You get to claim the deduction's value at the time you transfer it to their account, and you avoid capital gains tax.

They would pay the capital-gains tax when they redeem it for cash... but if exempt, they get the full value and the tax is completely avoided.

Effectively, your donation costs you less for the same impact.

It does take a bit of work to coordinate this with the receiving organization, and there may be brokerage fees, so it probably isn't worth doing for small sums.)Transfers within the same brokerage house may avoid those feee.) So again, you should talk to the charity about what's best.

But for larger donations, where larger probably starts at a few thou, it can save you a nice chunk of change.


The definite answer if you want to give a larger amount of money is: Ask the charity. Just drop them a mail with something like:

Dear Sirs,

I've decided to donate you $1,000,000 because I like what you do. Could you please tell me which option is more convenient and less costly for you? I can do either an online debit/credit card payment, send you a check by mail, or make a bank transfer [cross out whichever you can't do].

I'm looking forward to hearing from you.

Yours faithfully,

Even if you give "just" $2,000, it's surely enough to be worth for them writing you a reply and clarifying whichever way they prefer, so you don't waste neither their time nor the money this way.


This might be blasphemy in the context of an audience that may be most focused on the gift itself, but you should be donating in a manner that helps advance the landscape, as well as your particular favourite charity. Almost 90% of businesses are in the process of trying to move away from issuing and receiving checks, and several countries in the world have already stopped using them. Checks are inefficient, costly and in a resource constrained environment like that facing most charities, create an opportunity cost that is even higher than the manual processing cost that flows directly. As donors, we need to think about scale in a manner that many individual charities don't. Send your donation via ACH!


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