Are you ready yo make the most of Facebook's no-fee nonprofit fundraising?

We recognize that some nonprofits struggle with the decision to truly opt-in to Facebook fundraising. Whether concerns about protecting their brand or a simple reluctance to dedicate resources to social media fundraising, some nonprofits have chosen to ignore this fundraising channel.

That said, we believe Facebook fundraisers and Challenges are too valuable of an opportunity to overlook.

Why? Because Facebook is one of the few no-fee online fundraising methods.

What percentage does Facebook take from fundraisers?

Facebook doesn’t deduct any fees from nonprofit fundraisers held through the platform— so for nonprofits, Facebook fundraiser fees are effectively zero percent. Yes, you read that correctly!

This doesn’t mean that the fees don’t exist— but rather, that Facebook will pay them on your behalf. But, don’t just take our word for it. Continue reading to explore the topic of Facebook fundraiser fees in full through the following points:

• Covering the Basics of Facebook Fundraiser Payout
• A History of Facebook Fundraising Fees
• Facebook Fundraiser Fees: The Impact of No-Fee Fundraising

Use the above navigation to jump to the section that piques your interest or continue reading to explore our guide to Facebook Challenge fees in full. Let’s dive in!

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Covering the Basics of Facebook Fundraiser Payout

Before diving into Facebook fees, it’s important to understand how the platform handles financial transactions. The process of Facebook collecting and distributing donations is somewhat complicated (as payment processing tends to be).

When it comes to payout, there are two main questions that a nonprofit professional such as yourself might ask:

1. How does my organization access the funds raised through a Facebook fundraiser or Challenge?
2. Will Facebook take a cut of the donations before they’re transferred to my nonprofit?
   

Both are essential questions to successfully raise funds through the platform! That said, continue reading for the answers to both of these pressing questions.

How does Facebook process donations?

When it comes to distributing donations, whether for general fundraisers or birthday fundraisers, there are two general paths that a gift will take on its way to your organization: via Facebook Payments or via Network for Good.

Facebook Payments is a direct payout method, through which Facebook makes bi-weekly payments to your nonprofit once your nonprofit has passed the minimum fundraising amount on the platform ($50).

On the other hand, Network for Good is a nonprofit organization that processes Facebook payments (and those of a variety of other online fundraising platforms) through a donor-advised fund (DAF). A DAF is a specialized type of philanthropic savings account where a donor deposits their funds, the funds accrue interest, and then later are directed to the organization of the donor’s choice.

Across the world, Facebook uses a few different payment paths to process donations. For the purposes of this article, we’re going to focus on the two highlighted above as they’re the primary methods used in North America.

There are a few key differences between these payment paths:

• The time it takes to process the gifts. Facebook Payments processes gifts to be paid out two weeks after your organization reaches the minimum raise amount. However, because payments processed through Network pass through a DAF, the payout process can take 45-75 days. 
• The information that is available to your nonprofit. With Facebook Payments, donors can opt-in to provide contact information such as their email to the nonprofit they’re supporting. However, the option to provide this information isn’t available through Network for Good as Facebook can’t share that information with a third-party entity due to the social network’s privacy agreements with users.
  

Your organization needs to register with Facebook Payments directly to process funds in that manner. On the other hand, you don’t have to register at all to have funds processed via Network (though it is highly recommended to ensure the funding meant for you actually makes it to your organization). Whether gifts raised via Facebook fundraising on behalf of your organization are processed using Network for Good or Facebook Payments is up to your organization.

All of that said, when you see the steps required for processing payments, it’s easy to see why there would be some fees associated with Facebook Challenges. Both routes have administrative fees corresponding to the steps in the process. And, of course, there are card processing fees associated with actually pulling the funding from the donor’s account to begin with.

So, who covers those fees if not your organization?

Does Facebook charge a fee for donations?

There are fees associated with processing Facebook donations— about 5% for nonprofits in the United States, actually. Roughly speaking, about 2% of that goes toward administrative costs, while the other 3% goes toward payment processing.
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However, Facebook won’t make your nonprofit cover that cost. Since late 2017, Facebook has been covering the processing fees of Facebook fundraisers and Challenges for accredited nonprofit organizations.

It hasn’t always been this way though; up until just a few years ago, nonprofit organizations just like yours have covered the cost of processing. Let’s look at the history of Facebook fundraising fees to see how the process has evolved over the years.

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A History of Facebook Challenge Fees:

Then: Fees for all causes

When Facebook fundraisers first emerged in 2015, all processing and administrative fees were covered by the benefitting organization. This is a fairly run-of-the-mill approach with regards to fundraising technology— if your nonprofit uses some sort of online donation form to collect gifts on your website, there are likely transaction and card processing fees deducted from the donation before it’s added to your account.

So, for Facebook, this meant that a donation would be sent to your nonprofit’s account minus the five to six percent processing fees.

Then, in early 2017, Facebook was presented with a landmark petition. Amassing 42k signatures, the petition was started on behalf of the Syrian American Medical Society (SAMS). SAMS raised $1.5 million on behalf of Syrian residents, with approximately $85,000 of that funding going toward processing fees. The highly-circulated petition asked Facebook to waive those fees, which were equivalent to the nonprofit treating approximately 10,000 patients.

This petition was successful and led to changes that make Facebook fundraising one of the most impactful digital fundraising methods for nonprofits. Continue reading for a look at the current state of Facebook Challenge fees.

Now: No fees for nonprofits

In November 2017, Mark Zuckerberg announced that Facebook would cover all fees for nonprofit fundraising conducted on the platform going forward. This means that Facebook covers both the administrative and payment processing fees for all donations— whether processed through Facebook Payments or Network for Good— and sends 100% of the initial donation to the receiving nonprofit.

It’s important to distinguish between charity fundraisers and personal fundraisers— i.e. those funding personal causes such as medical expenses. The full processing fee coverage only applies to fundraisers conducted on behalf of accredited nonprofit organizations, while personal fundraisers will still need to cover the fees.

As you’ll see, the impact of this decision is huge for organizations like yours!

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The Impact of 0% Fundraising Fees

Comparing Facebook With Order Channels

Facebook’s decision to cover all fees associated with nonprofit fundraisers conducted on the platform made it one of the only no-fee online fundraising methods.

As you’re well aware, digital fundraising methods are key for modern fundraisers. Online fundraising pages, crowdfunding, peer-to-peer fundraisers— each is a popular channel of fundraising that your nonprofit likely incorporates in your overall strategy. These fundraising methods are convenient, secure, and draw on the concept of social proof to raise funds from new and current supporters, near and far.

However, all of these fundraising methods also have (not insignificant) processing fees associated with them. For example:

• Online fundraising pages: Beyond paying for the platform that will host your online fundraising campaigns and embed a donation form on your website, there is often a 2-3% processing fee plus some specified amount (ex: “$.30”) per transaction.
• Crowdfunding pages: Crowdfunding platforms often have a processing fee that ranges from 4-5%.
• Peer-to-peer platforms: Beyond the initial investment to access the peer-to-peer platform, there is often a 4-6% processing fee drawn from each transaction.
  

Some of these platforms allow supporters to cover the processing fees when they give. That said, let’s compare these popular fundraising methods with Facebook fundraising.

• Facebook fundraising: No start-up or initial investment with 0% deducted due to administrative and fundraising fees.
  

This is a major difference! For example, consider if your organization brought in 100 donations of $100 each. With Facebook fundraising, you’ve raised $10,000 for your nonprofit— and, the platform has handled all of the administrative tasks for you. With other popular online fundraising methods, that number could decrease to anywhere from $9,900 to $9,300.

For nonprofits where each and every dollar helps make a difference, no-fee Facebook fundraisers and Challenges can be a game-changer.  So, how can your nonprofit optimize this fundraising channel to raise more?

Making the Most of Fee-Free Fundraising

To make the most of Facebook's no-fee fundraising, you'll want to play an active role in the fundraising process. When you can discover fundraisers early on in the process, you can thank the users that started them for their efforts, encourage them to raise more, and even give them tips to do so. This can transform the relationship from a casual, one-time fundraiser to long-term support for your organization both across social media and beyond.

With that, let's discuss how you can play an active role in the fundraising process.

How To Use Facebook Challenges to Increase Your Fundraising Revenue

Facebook Challenges are time-bound fundraising events with a low barrier to entry, as they take place entirely through the social media platform.

During a Challenge, participants are tasked with completing a specific activity (such as walking 10K steps per day) over a defined time period (such as one month). While doing so, they raise funds from their friends and family members using a Facebook fundraiser.

During the Challenge, participants are added to a Facebook group pertaining to the effort. In this group, they’re able to connect with other participants, donate to one another’s fundraisers, share progress updates, and generally experience a sense of community with other individuals who have similar interests as them.

The steps of hosting a Challenge are as follows:

1. Choose a Challenge activity.
2. Create a Facebook group for participants.
3. Use paid Facebook ads to spread the word.
4. Thank participants for joining.
5. Engage with users in the Facebook group.
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Bonus! GoodUnited offers a turnkey social fundraising solution to activate your supporters using Facebook Challenges. This includes managing the initial Facebook ad campaign, managing any Challenge groups created, and posting thank-you notes on 100% of the fundraisers created. Further, we’ll create custom automated messaging sequences to connect with your supporters one-on-one, something we’ll explore further in the next section.

To see the results of GoodUnited Facebook Challenges in action (and see how the American Cancer Society connected with 13,000 supporters, about 90% of which were new to the organization), explore our ACS case study.

How To Discover User-Led Fundraisers on Facebook

Now, let's discuss fundraisers created by users independently and outside of your Facebook Challenges. For these, the goal should be to discover those users that have just started their Facebook fundraisers and have a decent amount of time left in the effort, to give you the greatest chance to positively influence their fundraising efforts.

While Facebook has historically made it challenging for nonprofits to collect information on those creating and giving to fundraisers through the platform, recent updates have made the process slightly easier.

Your nonprofit can discover newly created fundraisers by navigating to the Fundraisers page from your organization’s Facebook account. This will display all fundraisers created on your behalf, only showing those that have raised $50+. 

However, don’t stop here as those fundraisers that have raised $50+ are often almost finished. This means that you have less time to intervene, share tips and encouragement, and help the users conducting the fundraisers raise more than expected. Instead, you should then click on the newly released “Sort & Filter” button.

This will allow you to sort by the creation date (ex: newest to oldest) and filter by:

• Status (ongoing, complete)
• Fundraiser type (birthday, API)
• Creator description (generic, personalized)
• Thanked or non thanked
  

This functionality was a huge step for Facebook and allows your nonprofit to connect with fundraisers early on in the gift-raising process. In the next section, we’ll discuss how you can encourage those fundraisers to raise more.

Bonus! There may be times when you want to connect with past fundraisers that have raised a large amount or even those that have donated to fundraisers. To learn about how to find this information, read The Ultimate Nonprofit Guide to Facebook Fundraisers.

How To Promote a User-Led Fundraiser on Facebook

Once you’ve discovered newly created fundraisers, we recommend interacting with those supporters as soon as possible to give them the best possible chance to raise more.

Here are a few innovating ways to encourage and promote Facebook fundraisers started by your supporters:

• Thank the fundraiser. First and foremost, post a personalized thank you to each fundraiser created on behalf of your organization.
• Use Messenger to share fundraising tips. Connect with the fundraiser to share tips and encouragement over the course of the effort. For example, if the fundraiser donates to the campaign themselves, they’re significantly more likely to reach their goal!
• Share a Facebook fundraiser guide. Consider creating a user guide full of tips and resources to conduct a successful fundraiser, and sharing this with your supporters that have created campaigns on your behalf.
• Connect with the fundraiser after the fact. Continue stewarding that fundraiser after the effort completes to build relationships with them beyond social media.
  

At GoodUnited, we work with nonprofits to optimize the Facebook fundraising process. We post thank-yous to 100% of your nonprofit’s fundraisers and invite them to opt-in to Messenger, where we share customized messaging streams full of tips and encouragement. We can expand your Facebook community using targeted ads and Messenger streams. And then, we can provide valuable data and insight into Facebook fundraising activities conducted on behalf of your nonprofit and help your nonprofit raise more through the channel.

We’ve impacted 1 million+ fundraisers and helped nonprofits raise over $500 million in Facebook fundraising donations. To learn more, contact our team to request a demo today.

To learn more about Facebook fundraising and how your team can optimize the channel, explore the following additional resources:

• The Ultimate Nonprofit Guide to Facebook Fundraisers. Is your nonprofit new to the world of Facebook fundraising? Explore our ultimate guide to learn how you can make the most of this channel.
• Why Nonprofits Should Leverage Facebook Birthday Fundraisers. Birthdays are a huge aspect of Facebook fundraising, and our guide makes a clear argument for why your nonprofit should make the most of this opportunity (and how!)
• Facebook Fundraising. GoodUnited has perfected the process of effective nonprofit Facebook fundraising, and we’d be glad to share that knowledge with your team. Explore our Facebook fundraising services here.