When "Free" Isn't Free: Why Donor Tipping Is a Bad Fit for Most Nonprofits

A donor decides to give $500 to a nonprofit that sends care packages to deployed service members. At checkout, the charge comes to about $590.

Nobody raised the price. The fundraising platform added a 15% tip for itself, plus a processing fee, and both were switched on by default. The watchdog group Truth in Advertising documented that exact checkout in June 2026.

This is the "tipping" model. It lets a platform tell your nonprofit, truthfully, that the software costs you nothing. The question worth asking is who it does cost, and what it does to the way your donors see you.

How tipping works

Every online gift has costs. The card company takes a cut, and the software company has to keep the lights on. Somebody pays for both.

Most platforms charge the nonprofit. Tipping platforms charge the donor instead, and call it optional. At checkout, the platform asks your donor to add something extra for the platform itself. The amount is already filled in. To pay less, the donor has to notice it and change it.

The two best-known examples work a little differently:

	Zeffy	Givebutter
What the donor sees	A "voluntary contribution" to Zeffy, already filled in	A tip to Givebutter, already filled in, plus a processing fee
Suggested amount	3% to 18% depending on gift size, per Zeffy	About 15%, per Truth in Advertising
What the nonprofit pays	Nothing	Nothing with tips on; 3% plus card processing with tips off

Both companies are open with nonprofits about this. Zeffy says about 60% of donors add a contribution. That is the business model working as designed.

The trouble is that your donors never read the pricing page. They only see the checkout.

1. It erodes trust

A donor who gives to you is trusting you with their money. They are not thinking about your software vendor. They may not know you have one.

So when the charge on their card is higher than the gift they chose, they don't blame the platform. They wonder about you.

This is already happening in public. Truth in Advertising reported donor complaints on Reddit, the Better Business Bureau and Trustpilot from people who did not expect the extra charges and found the opt-out easy to miss. One donor on Zeffy's Trustpilot page wrote that an extra 17% was added to a donation "without any warning."

A long-running Reddit thread about Zeffy reads the same way. One donor reported giving $2,000 and finding $2,199.95 on the card. Another reported an unexpected extra $377 and warned nonprofits that the service "will leave you with angry and confused patrons." These are individual accounts that we cannot verify. They do show how the checkout feels from the donor's side.

It catches careful people too. A consultant at Nonprofit Marketing Nerds, who calls herself tech-savvy, wrote that she nearly clicked through a Zeffy checkout without noticing the tip had been added. Her firm is a partner of Donorbox, a competing platform, so weigh that. Her summary is still hard to argue with: "Nonprofits don't just run on donations. They run on trust."

It has also reached the courts. Two class-action lawsuits filed in 2026 accuse Givebutter of adding tips and processing fees to donations without proper disclosure or consent. Both are pending, and nothing has been proven. But the donors in those cases were giving to real organizations, and those organizations did nothing except pick a "free" tool.

Trust is slow to build and quick to lose. A small organization often has a few hundred donors, and many of them know the director by first name. One surprised donor telling a friend "they charged me extra" can cost you more than a year of software fees.

2. It confuses donors

A good donation form asks one question: how much would you like to give? A tipping form asks three. How much to the cause, how much to the software company, and whether to cover card fees too.

Truth in Advertising walked through a Givebutter checkout and found several things that make this harder than it sounds:

• The tip was shown as a percentage, not a dollar amount.
• The options to remove the tip and the fee were not obvious.
• The full total appeared only after the donor had entered payment details.
• Donors who tried to remove the processing fee were not told the nonprofit would receive the full gift either way.

BetterWorld, another fundraising platform, describes the result: donors who are unsure which charges help the nonprofit and which go to the platform, and who doubt how much of their payment reaches the cause. In its example, a $100 gift shows up as about $118.

Confusion has a cost you can see. An animal shelter director wrote on Trustpilot in August 2026 that online gifts dropped after her shelter moved to Zeffy, because donors were quitting at the 17% prompt. That is one person's account, not a study. But it matches what you would expect when a simple form gets a surprise at the end.

Commenters in the Reddit thread add two more details. One described the way out of the tip: open a dropdown, go past three preset amounts that start around 15% or 17%, and type in zero. Another noted that the tax receipt covered only the original gift, not the extra amount.

It also creates work for you. When a donor wants the tip back, the money is not yours to refund. They have to ask the platform, and you get the phone call anyway.

3. It is hard to turn off

If the tip prompt bothers you, the obvious fix is to switch it off. In practice that is either expensive or not offered.

Some platforms let you turn tips off, at a price. Once tips are off, the nonprofit starts paying a platform fee, which can be 3%, plus card processing. On $50,000 raised, a 3% fee is $1,500. That is three times what a 1% platform would charge. "Free" was only ever free while your donors were tipping.

On others, the prompt is the business. When donor tips are a company's only income, the ask is built into every form. You may find no setting to remove it. Donors can lower the amount or choose zero, but the organization cannot take the question away.

It also means the platform is counting on your donors to tip. One Reddit commenter said their organization was told its donors were contributing less than the card fees cost, and that card payments over $1,000 were then restricted.

That leaves the opt-out to each donor, one checkout at a time. One organizer shared on Reddit the instructions they give supporters for getting through the form without tipping. The list runs to seven steps. If you have to coach your supporters through your own donation form, the form is working against you.

"Free" for you is not free

Go back to the $500 gift. A 15% default tip is $75. A platform that charges the nonprofit 1% would earn $5 on that same gift.

The software did the same job both times. The tipping platform simply asked for fifteen times as much, and asked your donor instead of you.

Your budget shows $0 for software, and that feels like a win. But the money came from the same people who fund your mission. A donor with $575 to give has now sent $75 of it to a software company.

There is a bigger question than the math. What does the checkout say about how you see your donors?

A tip prompt says: we found a way to pay nothing, and it works because you will cover it, probably without noticing. Most directors would never say that sentence out loud to a supporter. The form says it for them, at the exact moment the donor is being generous.

Paying your own way says something different. Running a nonprofit costs money, and software is one of those costs, like rent or postage. You can tell donors that plainly. Donors tend to respect an organization that is straight with them about what things cost.

When tipping is a fair choice

Tipping platforms are not scams. Zeffy passes along the full gift even when the donor tips nothing, and both Zeffy and Givebutter offer tools MemberDrive does not, like event ticketing and auctions.

The model can be a reasonable fit if you are brand new with no budget at all, if you run one event a year, or if you have told your donors about the prompt and they are fine with it. The key word is told. Tipping goes wrong when the donor is surprised.

For organizations that live on repeat giving, such as churches, schools and membership groups, the same donors see that prompt month after month. That is where the model fits worst.

Five questions to ask any platform

1. What will my donor see at checkout, and what is already selected? Make a test gift yourself and find out.
2. Where does each extra dollar go: to us, or to you?
3. Can I turn the extra ask off? What does it cost me if I do?
4. Does the donor see the full total, in dollars, before entering a card?
5. If a donor wants the extra charge back, who refunds it?

How we handle it at MemberDrive

We charge the organization 1% of donations processed, plus Stripe's card fee. There is no monthly fee and no tip prompt. On a $100 card gift, Stripe takes about $3.20, we take $1.00, and you receive about $95.80.

We do offer donors a checkbox to cover those fees. It is different from a tip in three ways. It shows the exact dollar amount. It covers the real cost of that one gift, about $4 on $100, not 15% of it. And the result is that your organization receives the full gift.

One thing to be upfront about: that checkbox starts checked unless you change it. Making donors opt in instead is one setting in your campaign.

The difference is that we never call any of this free. Our 1% is on our pricing page, the donor sees the cost in dollars, and you decide how your form behaves.

Software should be a line in your budget, not a surprise on your donor's card statement. See how MemberDrive compares, or start for free.