For the past several years I have served on the board of a 501(c)(3) charitable organization, American Friends of Whistler. We provide opportunity for people spending significant time in Whistler to support charitable needs in our second community and through our annual “Inside Scoop” event let our supporters know about what is happening in the municipality and on the mountain.
With my new free time, I am taking on some new duties. One is to manage our web presence and the other is to become treasurer and learn the intricacies of Form 990-EZ.
Thursday I spent an amazingly long time at the downtown Seattle branch of Wells Fargo Bank with the outgoing treasurer doing transfer of signature authority. It is not simple like the last time I was physically in a bank when there was really a signature card. Now everything is electronic. I am not sure how they can tell if a real signature looks like the poor imitation rendered on a digital signing pad. But I was able to sign over and over and over again, this form and that form, and enter a PIN three times. A little over a hour later, all done. The young banker was nice enough, but it is difficult to be convinced that these processes are at all efficient.
At the intersection of web presence and tending donations is thinking about accepting credit cards. We have nearly exclusively received checks. Occasional transfers of stock. Should we accept credit cards? Would giving go up? Or would the costs of accepting credit cards simply not be worth the effort?
And so started my adventure in puzzling out our options.
Straightforward and in our control would be to establish a PayPal account. As a 501(c)(3), they would take 2.2% + 30¢ per transaction ($2.50 on a $100 dollar donation). At present our administrative expenses are ~2.4% (we are run by volunteers) and so this seems like a big number, but realistically we would anticipate large donations by check and so it might add a couple of tenths of a percent to administrative expense. This might be the right pathway.
But there are two families of alternatives that avoid incurring a direct administrative expense that shows up in a 990, at least in ours. One family is GuideStar/Network for Good. From the GuideStar site one channels funds to Network for Good which is a 501(c)(3) itself. They issue a receipt for a $100 deduction. They would send us $95.25, taking 4.75%. If one goes straight to Network for Good and makes a $100 donation to us, we receive $100. But you need to give them $105 for that to happen, and they encourage you to give $110 or $115. By either path, funds could be immediately transfered to our bank account. The other family is American Express/JustGive. The American Express option requires an American Express card, but a $100 donation yields $97.80 to us. (And with my American Express card, I’d get 100 miles). Going directly to JustGive, a $100 donation will yield $97, but they encourage an additional optional donation directly to them. Funds received in a month are sent by check on the 10th of the next month. None of the money disappearing into their 501(c)(3) coffers are an administrative cost to us. My overall impression is a lack of transparency around the overall process; while there are FAQs from which I extracted all of this information, direct disclosure would seem appropriate. In the absence of direct disclosure, I visited GuideStar to retrieve the 990 for both Network for Good and for JustGive. Where does the extra money go? Network for Good does not have a 990 for 2009 (what’s up with that) so I downloaded the one for 2008. Scale ~$70M of charitable grants. Seven employees with salaries over $100k. Administrative expense about 10%. JustGive in 2009. Scale ~$28M of charitable grants. CEO is paid $62,000 per year. Administrative expense about 7%. So perhaps JustGive is worthy of consideration?
Perhaps the most interesting nugget is that without us doing anything, you can donate to American Friends of Whistler right now by any of these paths! Really! Just search for American Friends of Whistler at GuideStar or Network for Good or American Express (Members Give is the service mark) or JustGive. Thanks for your support, but supporter beware.