The hidden cost of giving
When you make a charitable donation to a local nonprofit, you naturally assume that 100% of your hard-earned money goes directly toward fulfilling that organization's mission. However, a quiet and troubling shift is happening in the philanthropic space.
A vast number of third-party, "middleman" entities, including online invitation platforms, crowdfunding sites, online obituary platforms, and social media networks, are positioning themselves between generous donors and the causes they want to support. While these platforms offer convenient digital clicks, they carry a hidden cost that most donors completely miss.
We recently saw a sad example of this first-hand. Following the passing of a longtime volunteer, a neighbor used an online obituary platform's embedded link to make a $100 memorial gift. By the time that corporate platform and its affiliated payment processors deducted their fees, we received just $91.80.
Beyond the financial loss, these third-party platforms create an invisible administrative burden, draining valuable time from already stretched staff members. To track down a single gift, a staff member must first create an account with the outside vendor, log in, navigate their specific dashboard, and filter through lists of individual transactions. Even when the donation is finally located, the data cannot simply be viewed or saved; it must be exported into a spreadsheet. This file is not immediatelydownloaded, forcing staff to wait for the platform to process and email it.
What should be a seamless process becomes a multi-step hurdle, pulling resources away from our actual mission just to retrieve basic transaction data. To make matters worse, these third-party processors routinely withhold full donor information in the name of privacy or platform ownership. Because they do not pass along mailing addresses or contact details, we and other charities are left completely unable to send a proper thank-you letter and express our gratitude to the donor.
This is not an isolated incident. Popular platforms like GoFundMe, Facebook, Evite, Paperless Post, PunchBowl, and many more seamlessly prompt users to "click here to donate," but they then funnel transactions through multi-layered networks that chip away at the total gift. For-profit companies are quietly capitalizing on your generosity. If 6% to 10% of a community's charitable giving is routinely redirected into the pockets of out-of-state corporations, the cumulative impact on the nonprofit sector could be enormous. Every dollar lost to corporate fees is a dollar pulled away from funding all the great work being done here locally!
There are ways we can protect our local charities from these hidden costs. The absolute best way to ensure your generosity has maximum impact is to cut out the corporate middleman entirely. If you want to support a cause, take the extra minute to mail a traditional check, arrange a check through your bank, donate through e-check on the charity’s website, or give directly by credit card on that specific nonprofit’s secure, official website.
Our local charities work diligently to stretch every dollar. Let’s make sure more of our community's kindness stays right where it belongs: working in our communities to change lives.
George Roberts is the president of Mount Pleasant Meals on Wheels-Feeding Friends and serves as PR director of the Rotary Club of Daniel Island.