The effective fee rate means ‘The total fees for the average payment.’
What is the effective fee rate? #
Simply put, it is the rate per transaction you are paying in fees total (as in both ConnectionPoint’s—if applicable—and your payment processors’).
Whether you even need to care about this number is dependent on which pricing model your campaign is running in:
Optional Tipping –
This number will stay put at whatever your payment processor rate(s) is(are). Since Stripe and PayPal’s rates have a “plus X amount of cents” included, this number is approximate. For example, most Stripe rates are at 2.9% + 0.30 in North America, so your effective fee will remain around 3.5%. So if your campaign is on this model, you don’t need to care about the effective fee rate.
Flat Rate –
This number will also remain stagnant but will be higher because ConnectionPoint’s 5% platform fee is included. In the same example above, it will remain at 8.5%. If your campaign is on this model, you also don’t need to care about an effective fee rate.
Fee Recovery –
NOW you care about this number. The payment processor and ConnectionPoint’s fees are still being charged, but we’re asking your supporter if they will cover the fees for you so your campaign can receive the full intended contribution. This number considers that some (hopefully, most) of your fees are being covered, so it averages the fees that are NOT covered over each contribution you’ve received.
The point is to check to see if using this ‘Fee Recovery’ model saves more money per contribution than using the ‘Optional Tip’ model, where ConnectionPoint charges nothing but you still have to pay Stripe or PayPal their fees.
If your effective fee rate is lower than your payment processor rates, you are doing better than on the Optional Tip model! Congratulations! You’re winning!
If your effective fee rate is higher than your payment processor rates, you are paying more than you would be on the Optional Tip model. You can switch pricing models to lower the cost of your digital fundraising by removing ConnectionPoint’s fees.
How to find a campaign’s effective fundraising fee #
STEP 1 – Under ‘Report,’ click ‘Analytics.’
STEP 2 – Scroll down to ‘Payments KPI,’ and your effective fundraising fee is the last column.
