Church Money, Donations & Financial Controls

Online Giving, Text Giving and Processing Fees

Published 2026-09-03 · Church Money, Donations & Financial Controls

Short answer: with church online giving fees, the donor's contribution is the amount they gave, not the amount that reached your bank. Record the gift gross, record the processing fee as an expense, and receipt the donor for what they actually paid. Recording only the net deposit understates every donor's statement and makes your books impossible to reconcile.

The bank shows a deposit of $4,862.17. The giving platform shows $5,000 of gifts. Someone has to explain the difference to the board on Tuesday, and the finance report already went out with the smaller number on it.

That gap is fees, and how you handle it decides whether your donor statements are right. The donation receipt rules don't care what your processor deducted on the way through.

What you are actually paying for

Most church giving costs come in three layers, and knowing which is which is how you have a useful conversation with a provider.

Card network and interchange costs. Set by the card networks, charged on every card transaction, and not really negotiable by a church of any size. Usually expressed as a percentage plus a fixed amount per transaction.

The processor's margin. The company moving the money adds its own slice.

The platform's software fee. Some church giving platforms charge a monthly subscription, some take a slice per transaction, some do both.

Bank transfers (ACH or direct debit) normally cost less than cards, often a small flat amount per transaction rather than a percentage. For recurring monthly gifts, that difference compounds quietly all year. It's worth pulling your last three statements and working out your actual blended rate per channel rather than relying on the headline number in the sales material.

Here's a worked illustration, using assumptions you should replace with your own statement's figures. Suppose card gifts cost 2.9% plus 30 cents and bank transfers cost 1% capped at a few dollars. A $200 monthly recurring gift by card costs roughly $6.10 a month; the same gift by bank transfer costs a fraction of that. Multiply by your recurring donor count and you have a real number, one worth knowing before the next contract renewal and worth nothing at all if you never calculate it.

None of this is a reason to avoid electronic giving. Cash and checks have costs too. They're just paid in volunteer hours, counting errors and gifts that never arrive during a month when someone was traveling.

Gross or net? The receipting question

Record and receipt gross.

If a donor gives $500 by card and $485.20 lands in your account, that donor made a $500 contribution. Your books should show $500 of contribution income and $14.80 of processing expense. The donor's statement shows $500, because the acknowledgment states the amount of cash the donor contributed (IRS Publication 1771, Charitable Contributions).

Receipting the net figure gets three things wrong at once: the donor's statement understates their giving, your contribution income is understated in the financial statements, and your expenses are understated by exactly the same amount, which hides what electronic giving actually costs the church.

The fee is a cost the church chose to incur to make giving easy. Show it. A board that can see the annual processing cost on a line of its own can make a decision about it. A board that can't see it never will.

The same principle applies to what appears on year-end statements. The full sequence is in the year-end giving statement checklist.

"Cover the fees": how to offer it honestly

Most platforms let a donor tick a box to add the processing cost so the church receives the full intended amount. Many donors like it.

Two rules make it clean:

Receipt the total the donor actually paid. If they gave $500 and added $14.80, they paid $514.80 to the church, and that's the contribution figure. They didn't buy anything with the extra; they gave more.

Say what the box does, in plain words. "Add 3% so the church receives your full gift" is honest. A pre-ticked box the donor has to notice and clear is a dark pattern, and this isn't the audience for one. Leave it unticked and let people choose.

If your platform reports the covered fee as a separate line rather than adding it to the gift, check what your statements do with it before January, not during.

When was the gift actually made?

For year-end purposes, an electronic gift is generally made when the transaction is processed, not when the money settles into your account. A card gift authorized on 31 December is generally a gift for that year even though the deposit arrives on 3 January (IRS Publication 526, Charitable Contributions).

Three practical steps:

1. Ask your provider for the last processing time of the year, in writing, and publish it. "Online gifts must be submitted by 11:59pm on 31 December to be recorded in this year" is a sentence your donors will thank you for.
2. Reconcile the December to January boundary carefully. The deposit lag will straddle the year end every single year.
3. Do not re-date anything to be helpful. The processing date is the fact. A gift processed on 2 January is a January gift.

The timing question on the other side (when your statements have to reach donors) runs on the statutory acknowledgment rule (IRC §170, Charitable contributions) and is covered in the $250 rule and why timing matters.

The third-party platform trap

This one costs churches real accuracy every year and almost nobody in the office knows about it.

When someone gives through a general fundraising platform (a social media fundraiser, certain payment-provider giving funds, some employer matching portals) the gift is frequently made to that platform's own charitable entity, which then makes a grant to your church. Legally the individual didn't give to you. The platform did.

If that's how it works, then:

• You shouldn't send that individual a contribution statement. They have their own acknowledgment from the platform, and issuing a second one from the church can produce a duplicated deduction.
• Record the money as a grant from the granting organization, not as an individual gift.
• Thank the person warmly, just not on a document that looks like a receipt.

The way to know is to read the platform's terms and look at what arrives: a single lump payment from an organization, often with a donor list attached, is a grant. Individual transactions settling into your merchant account are your gifts.

Your own church-branded giving page, running on your own merchant account, isn't affected. Those are gifts to the church and you receipt them normally.

Reconciliation and controls

Electronic giving moves the fraud risk from the offering plate to the admin login. Adjust accordingly.

• Reconcile monthly, three ways: giving platform gross, bank deposits net, general ledger. The difference should equal fees exactly.
• Limit admin access to the giving platform, and review who has it twice a year. A former staff member with a live login is a live problem.
• Protect the deposit account setting. A request to change where donations are deposited (by email, however plausible) is a classic fraud. Require verbal confirmation on a known number, from a second person, every time.
• Separate duties. The person who can issue a refund shouldn't be the only person who reconciles.
• Never store card numbers. Don't take card details over the phone and write them on a form. Send a giving link instead.
• Handle chargebacks and failed recurring gifts properly: reverse the contribution record, and don't leave a gift on the donor's statement that was never collected.
• Watch for card testing. A run of tiny transactions from unrelated cards is fraudsters validating stolen numbers on your donation page, not a wave of small givers. Tell your provider immediately and turn on whatever screening they offer.

How churches get this wrong

Only the net deposit is recorded. Everything downstream is then wrong.

Fees are buried inside contribution income rather than shown as an expense, so nobody knows what electronic giving costs.

Individual statements go out for platform grants, creating duplicates.

Nobody publishes the year-end cut-off, and donors who gave on 31 December find the gift in the wrong year.

Recurring gifts are never reviewed. Donors move, cards expire, gifts silently stop. A monthly failed-transaction report and a friendly email fixes more giving problems than any campaign.

Refunds are handled by whoever is asked, with no policy and no second signature. What to do instead is in refunding a donation: when you can and how.

One person owns the whole platform: the login, the settings, the reconciliation and the reporting.

A worked example

March, one small church. The platform reports $18,400 in gifts: $14,100 by card, $4,300 by bank transfer. Deposits total $18,006.

The books should show contribution income of $18,400 and processing expense of $394. Donor statements show what each person gave, gross. The board's monthly report shows the $394 on its own line, so by December the finance team can see the annual figure and decide whether to promote bank-transfer giving, offer the cover-the-fee option, or leave it alone.

Also in March: two donors gave through a social platform's fundraiser. That money arrives as one payment from the platform's charitable arm with a list attached. It's recorded as a grant, those two people get a thank-you note and no contribution statement, and the finance team writes one line in the file explaining why.

Total extra effort: about fifteen minutes a month. Total value: a reconciliation that works and statements you can stand behind.

Common questions

Should we tell donors what the fees are?

Being open about it is good stewardship and most churches now are. Keep it factual: a short line on the giving page explaining that electronic gifts carry a processing cost and that donors may cover it if they wish. Don't guilt anyone.

Is text giving different?

Mechanically yes, legally no. Same gross recording, same dating rule, same receipting. Watch the first-time registration flow, and confirm how the provider passes donor details through so gifts attach to the right record rather than piling up as unidentified.

Can we ask donors to switch to bank transfer?

You can invite them. Frame it as more of their gift reaching the ministry rather than as a complaint about cards, make the switch genuinely easy, and accept that some donors won't move. The difference is worth calculating from your own statements before you decide how hard to push.

A donor's card was charged twice. What now?

Refund the duplicate promptly, reverse the contribution record so it doesn't appear on their statement, document who authorized it, and tell the donor it's done. Speed matters more than process here, but the process still has to be followed.

Do platform confirmation emails count as receipts?

Treat them as transaction confirmations. Some carry the required acknowledgment language and some don't, and the obligation to substantiate a gift to your church sits with your church (IRS Publication 1828, Tax Guide for Churches). Don't assume; issue your own statements and include those gifts.

The practical wrap

Record gross, expense the fee, publish the cut-off, know which of your income is grants rather than gifts, and reconcile three ways every month.

The fees themselves are a procurement question you can look at once a year with real numbers in front of you. The receipting isn't optional and it's the part that reaches your donors. Get that right first. For the wider picture of the church's financial controls, start with the church money essentials, and for statement wording, the magic words every contribution statement needs.

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Make the statements match the money. The Donation Receipt & Gift Acceptance Kit is the donor acknowledgment letters and the gift-acceptance policy, written to the substantiation rules: the annual statement, the single-gift letter and the wording for gifts where the donor received something in return. $49, instant download.

*Faith Docs provides self-help document templates, not legal advice. We are not a law firm. For representation, consult a licensed attorney.*