The most consequential part of choosing a church giving provider? The giving fees.
Here’s why:
The pricing structures of church giving providers are unique & complex – and unlike any other tool your church is likely using.
The result?
Misunderstanding the true costs of church giving software commonly sets churches back thousands of dollars every year. Needlessly.
So the purpose of this post is to – once and for all – provide clarity on how these costs are calculated.
Because transparency is also unusual in our industry.
Let’s dive in.
Every digital transaction comes with a fee
The first thing to understand is that every digital transaction has a fee attached to it.
Meaning, any time you pay for groceries, fill up your car with gas, or donate to your church with a credit or debit card – there’s a fee that must be paid.
For most businesses, there’s a fairly straightforward solution to this challenge:
Account for how many people use cards to pay for what you sell and build that fee into the price of the products themselves. Simply put, offset the fees with pricing adjustments.
Of course, this complicates things for churches. Because we can’t simply raise the price of donations. It doesn’t work that way.
So what can be done?
How much are the processing fees?
First, let’s outline just how much processing fees actually cost.
According to Square, an American financial services and digital payments company, when it’s all said and done, the average cost of processing payments for businesses that do between $10,000 and $250,000 in annual revenue is between 2.87% and 4.35% per transaction.1
And according to the National Congregations’ Study of Economic Practices, the median annual revenue for churches in 2017 was $169,000.2 Meaning, churches fall within the bracket above for annual digital revenue.
Bottom line: The average church can expect to lose between 2.87% and 4.35% of every digital gift they receive to processing fees.
Said differently, for every $1,000 in donations, churches will forfeit $28.70–$43.50 to fees.
Obviously, this is substantial. But where does this money actually go?
The fee is paid to credit card companies (VISA, Mastercard, American Express, etc.). And these fees afford us the convenience of using cards to pay for things while ensuring every transaction is compliant, safe, and secure.
So that’s a broad look at the role fees play in every digital transaction around the world.
Let’s now narrow our focus to the world of church giving…
The cost of church giving providers
Because here’s the thing…
Every credit card company charges a different rate. American Express’ fees are different from VISA’s which are different from Mastercard’s and so on.
It gets complicated fast.
So this is why church giving providers exist:
- Church giving providers blend various digital transaction fees together to offer churches a more predictable rate
- Because church giving providers work with many churches, they can generally negotiate a more competitive rate with credit card companies than an individual church can because of the volume of donations they’re processing
- Giving apps also provide churches with the necessary tools to manage their giving (dashboards, donation portals, reporting tools, fund & gift management, accounting, people records, etc.)
And what about the cost? Let’s take a look at a few of the major church giving providers:
We’ll start with Tithely. Tithely’s rates are 2.9% + $0.30 for every transaction. Unless the donor uses an American Express card – then the rate increases to 3.5% + $0.30. Pushpay doesn’t publicly disclose its pricing, but their rates are in the same ballpark.
Kindrid rates range between 2.6%-3% + $0.30. Importantly, Kindrid is also part of a larger parent company called Ministry Brands that includes easyTithe, Simple Give, eGiving.com, Mogiv, Clover Give, e360 Giving, and more – so expect the pricing of each of those platforms to be comparable.
Subsplash rates range between 2.3-2.9% + $0.30. It’s possible to secure a lower rate with Subplash if you use their full platform of products (platform pricing isn’t publicly disclosed).
And that brings us to Nucleus Giving. Our platform. We charge a flat rate of 1.9%. For every card. For every church. For every transaction.
Essentially, the Nucleus Giving rate is ~1 full percentage point lower on average compared to other major giving providers – accounting for a ~33% overall reduction in fees.
Which begs the question – what’s the reason for this difference? We’re all working with the same credit card companies. The same payment processors. So what’s happening?
Here’s what happening…
The hidden cost of rev-share
The term every church leader needs to familiarize themself with is rev-share.
What is rev-share? And how does it work?
Essentially, after a church giving provider has negotiated its rates with credit card companies and payment processors, the provider will then artificially inflate these fees to keep a bit of every single tithe and offering for themselves. It’s wildly profitable. This is called rev-share.
Now, you might be wondering – how much exactly is rev-share? What’s the percentage?
That information isn’t public. And it’s different for every provider. But here’s a simple way to estimate it:
At Nucleus Giving, the blended rate we receive from the credit card companies is 1.9% flat. And so the disparity you see between the Nucleus Giving rate of 1.9% and the rates that other church giving companies charge is an easy way to estimate how much they’re inflating their fees to keep for themselves.
So with Tithely, their rate is 2.9% + $0.30 (and for AMEX it’s even more, but let’s set that aside right now for the sake of simplicity).
Subtract that rate from Nucleus Giving’s rate of 1.9% – and the difference is 1% + $0.30. Again, this math isn’t exact – but it does provide an accurate range.
There’s more though…
Because a platform like Pushpay is owned by a public company, they have to publish annual reports on how much they earn from churches and *how* they earn it. This gives us insight into just how profitable rev-share is for church giving providers.
So while Pushpay may not disclose their fees until you’re further into the sales process – they do disclose how much they earn off churches overall.
From their annual report (which is publicly available), of the more than 11,000 churches that use their platform, the average church is paying Pushpay $1,475 USD each month; close to $20,000 per year.
Moreover, if you look at the breakdown of how much Pushpay earns from their subscription costs vs. their rev-share processing costs – that’s where you can truly see the disparity:
About 28% of Pushpay’s revenue comes from monthly subscription costs; 72% comes from rev-share. Meaning, the extra 1% or so they add to inflate the processing fee translates to about ¾ of their overall revenue.
To be clear:
We’re using Pushpay as the example here because they release publicly available data. Platforms like Tithely, Subsplash, and Ministry Brands are private companies – so they’re not obligated to release that kind of information. But knowing their cost structures are similar, and more importantly, that their profit models are all powered by rev-share…it’s reasonable to assume that they’re earning similar amounts.
This is why platforms like Tithely, Subsplash, or Givelify can publicly advertise their subscription costs as $0 per month. Because monthly subscription costs are inconsequential compared to rev-share.
Now, it should go without saying that from a business perspective, this is a great business model.
As for myself, and my company, we’ve never been comfortable with it.
In fact, when we were in the early stages of building Nucleus Giving and negotiating with the credit card companies, they were taken aback when we explained that we didn’t want to participate in rev-share.
Because it’s the standard in the industry. And it’s quite lucrative.
We just think it’s time for a new standard.
Because this kind of pricing doesn’t exist elsewhere. It’s unique to the church giving space.
For example, imagine your church needed new presentation software. And so you end up talking with ProPresenter and when you get to the pricing they tell you, “Yeah, to use ProPresenter the cost is 1% of all your tithes and offerings.” That would be absurd.
And yet, this pricing persists in the giving space because we allow it.
Compliance & security fees, chargebacks, and annual fees
Believe it or not – there are more fees to discuss.
Because there are other costs typically associated with digital transactions including compliance or security fees, chargebacks, annual fees, etc.
How much are these additional fees?
According to Square, additional fees will push your quoted rate anywhere from 28% to 60% higher than what you see publicly advertised.3
And the reason these kinds of fees aren’t advertised is that they’re specific to your account and the behavior of your church’s donors.
The new standard for church giving (fair pricing & eliminating rev-share)
For the sake of comparison, let’s now talk about the pricing model of Nucleus Giving. Because we are unique.
First, the flat rate for any donation made through Nucleus Giving with a credit card is 1.9%.
This rate is the lowest in the industry. How? Simply because we’re not inflating it to keep any for ourselves. Anyone could do this.
The best part?
By eliminating rev-share, Nucleus Giving has helped churches reclaim millions of dollars in deserved donations. Even better? This hasn’t compromised our platform’s growth nor our ability to sustain a profitable business.
And we don’t stop there. Because with Nucleus Giving, we also cover any additional cost or fee typically associated with digital transactions. So there are no surprises.
Finally, we take it even one step further.
So that when a donor gives to your church and the 1.9% processing fee is due, we calculate this fee and add it on top of each donation made automatically.
For example, if a donor submitted a gift of $100 to your church, that gift would cost the donor $101.90. They cover the 1.9% processing fee.
And we do this to ensure that you, the church, never lose any of your donations to fees. Ever.
So here’s what that actually looks like to a giver when they’re donating through Nucleus Giving…
When you arrive at the final stage of the GivingFlow, the total cost comes up at the bottom for the giver and it shows the convenience fee added with a button for More Info.
When that button gets clicked, a new overlay appears explaining how much money churches lose to fees every year, and explains that with Nucleus Giving, we make sure every cost is covered for the church so they don’t lose any of the intended donations.
Most importantly though, we also give the donor the choice – to opt out of the percentage fee themself.
Here’s how we do that…
Eliminating percentage fees for both churches *and* donors
To this point, we’ve talked exclusively about credit card giving. But there’s actually another way to give digitally: through your bank account. This is sometimes called ACH giving.
The best part about ACH (bank account) giving? There is no percentage fee charged. That’s because there are no credit card companies involved in a bank account transaction. Credit cards charge percentage fees. Banks don’t. So when you give via ACH, you never have to pay a percentage fee. Instead, the cost is just $0.25 flat.
Back to Nucleus Giving…
We give donors the option to opt-out of the credit card convenience fee altogether. How? By donating through their bank account (ACH). In fact, not only do we provide this option to donors – we recommend it!
And the best part is that giving via bank account is just as simple with Nucleus Giving as giving via credit card. You simply login to your online banking, select the account you wish to donate from, and it’s done.
By doing this, we engage the donors of your church as partners, educate them on the true cost of digital giving fees, and importantly, give them the choice to opt-out of the fee as well. The result? Churches and donors saving millions and millions of dollars on fees.
For example, here’s a church that got a big gift for $42,000. The giver donated through their bank account and there was no percentage fee lost.
Here’s another example – this time for $40,000. With a fee of just $0.25 because it was given through a bank account.
Of course, these are the glamorous examples, right? When a bigger donation comes in all at once. But it doesn’t matter if it’s a $40,000 donation all at once – or smaller donations that eventually add up to $40,000 collectively. The fees are identical.
And this is the inherent problem of signing away a percentage of your giving to use a church giving provider – the fees are inescapable.
With that being said, here’s a more everyday example. A church of 250. When the pandemic hit, their digital giving grew. And because they were using Nucleus Giving, they saved roughly $3,000 in fees that would have been lost.
When it’s all said and done, fees can easily account for a ~3% margin in a church’s budget. For churches like the one above, these donations are reclaimed instead of being surrendered to fees.
Why most church giving companies *still* charge percentage fees on ACH (bank account) gifts
Ready for the real punch in the gut?
Recall with ACH giving that there are no percentage fees to be paid because there are no credit card companies involved.
The cost of an ACH gift is just $0.25. No percentage fee whatsoever.
And yet, when we look at the pricing tables for church giving providers – what do we find?
For Tithely, the rate they charge for ACH giving is 1% + $0.30. Again, Pushpay doesn’t publicly disclose its pricing, but it’s virtually the same.
For Kindrid and Ministry Brands, 0.75%-1% + $0.30-$0.35 dependent on volume.
For Subsplash, 0.5%-1% (this time with no potential rate discount if you pay for the full Subsplash platform).
Bottom line:
Those percentage fees go straight to the giving companies.
Unlike credit card fees that are inflated by church giving providers to keep a portion of each donation for themselves, ACH percentage fees are contrived. Because banks don’t charge percentage fees on transactions.
And this behavior persists and continues because it’s the norm. It’s the standard. We allow it to happen. Churches pay the price – literally – and these companies pad their profit margins.
And let’s be clear for a moment, I’m not against turning a profit as a company. Nucleus is a for-profit business. We’re not a charity. We’re profitable. And we’re growing at a healthy, sustainable pace.
Rather, my frustration stems from companies gouging churches. Having them sign away a percentage of every tithe and offering they receive digitally just to put a donation portal on their website?
Again, just imagine if your website provider asked the same thing? Or your worship presentation software? Or the software you use to plan your services and schedule your volunteers? The church giving industry is the only place it exists. But it doesn’t need to.
How does Nucleus Giving make money?
Generally, when I talk about Nucleus Giving and the changes we’re pushing for in the giving space, there are a series of follow-up questions – so let’s briefly cover those now.
First, how does Nucleus Giving make money?
Simply put, we charge a flat monthly rate. This is the same pricing model virtually all software platforms use – it’s straightforward, predictable, and fair.
For us, that monthly cost starts at $29/month. It tops out at $199/month. Pay for a year in advance and you get two months free.
This monthly fee is the only cost churches on our platform ever pay.
And determining your monthly cost is as simple as picking your tier based on the size of your church.
The reason we price our platform in this way is to ensure churches of every size (even smaller churches with smaller amounts in digital giving) enjoy monthly savings.
And to help with predicting the cost differences for your church with Nucleus Giving, we actually have an interactive savings calculator you can try out:
Click here to try out the Nucleus Giving savings calculator
And for a visual comparison, below you’ll find a diagram comparing the monthly costs of Pushpay and Nucleus.
(and again, we’re using Pushpay as the stand-in here, but you can expect most companies that participate in rev-share to be earning similar amounts per church because their pricing strategies are the same, and the majority of income providers earn from churches is from fees, not from monthly subscription costs)
Believe it or not, the average cost to a church on Nucleus Giving for a whole year, is half the cost of just one month on Pushpay.
Understandably, this may all sound too good to be true.
The thing is, the current pricing model for church giving providers is so needlessly expensive, that a traditional pricing model for software is a dramatic improvement.
Aren’t you just passing the fees onto the giver?
“How is that different from other giving companies? Instead of the church paying the fees – the donors pay them instead, right?”
This is a misconception we hear sometimes so it’s worth addressing.
If you’ve made your way through this entire article, you are now aware of rev-share and how processing fees are inflated.
When people see Nucleus Giving for the first time, and see we pass the processing fees onto the donor automatically, it’s understandable to conclude that we’re the same as every other company – except, we make the donors pay the fees instead of the church.
But the reason our fees are the lowest in the industry is because we don’t participate in rev-share. Essentially, the Nucleus Giving rate is ~1 full percentage point lower on average compared to other major giving providers – accounting for a ~33% overall reduction in fees.
We then pass on the considerably smaller fee to the donor. Ensuring your church receives 100% of every intended gift.
Finally, we then give the donor the option to opt-out of the percentage fee themself by donating through their bank account.
This order of operations allows us to minimize processing fees as much as possible for both churches *and* donors.
What about Planning Center Giving?
There’s one major church giving provider that I have yet to mention: Planning Center Giving.
And this is because Planning Center is one of the few, rare exceptions of a church giving provider that does not participate in rev-share – just like Nucleus. Planning Center’s fees for card giving are slightly higher than Nucleus’ – but comparable.
Planning Center’s fees are 2.15% + $0.30 for credit and debit card donations. And 0% + $0.25 for ACH bank account giving.
So how is Nucleus Giving different from Planning Center Giving? If at all?
The primary difference between Nucleus and Planning Center is that with Planning Center Giving, donors are given the choice to opt-in and cover the percentage fee. With Nucleus Giving, donors have the choice to opt-out and avoid the percentage fee – by switching to bank account giving.
The options are very similar. The difference is in how each platform presents the choice.
Now, when these two platforms are stacked up against each other – how do they actually perform at scale? We have the numbers for this. You might expect the performance to be virtually the same. But in practice, it’s quite the opposite.
According to Planning Center, the average effective rate they’re seeing for churches in reports that span greater than twelve months is currently around 1.6%.4
What does this mean? What is an effective rate?
Your effective giving rate is the average amount paid to fees per transaction in your church after every fee and donation is tallied up.
Recall that the average effective giving rate as reported by Square is between 2.87% and 4.35%.
So the fact that Planning Center’s effective rate is 1.6% is good. Quite good in fact.
And it’s the direct result of not participating in rev-share.
So what is the effective rate for Nucleus Giving? We ran the numbers.
We added up every dollar and cent ever given through our platform (hundred of millions in total). And we found that ~70% of our giving volume was from bank account donations.
Meaning, the effective rate for Nucleus Giving is just 0.63%.
Now, as we’ve discussed throughout, a single percentage point makes a colossal difference in the world of fees. Entire business models for hundred-million-dollar giving companies are predicated on a 1% fee.
One percent is the difference between a provider that participates in rev-share and a provider that doesn’t.
With that in mind, when comparing Nucleus Giving to a provider that doesn’t keep donations for themselves like Planning Center, we still shave off another whole percentage point just by giving parishioners in churches the choice to opt-out of the fee, rather than the choice to opt-in to the fee.
Now, for the sake of clarity, the effective rate on Nucleus Giving for *churches* is always 0% – because you, the church, will never lose donations to fees.
The purpose of this diagram though is to show just how effective our method is at minimizing fees for churches *and* parishioners overall.
For those that don’t mind paying the credit card fee because of the convenience that comes with it – they do. And for those that wish to donate without being charged a percentage fee – they do, by donating through their bank account.
And by bringing your donors into this economic equation and making them partners, everyone wins. It’s the most effective giving strategy by far for avoiding fees. And more importantly, we think it’s in line with the heart of what church should be at its best – everyone playing their part as a joint community.
As for rev-share giving providers, their effective rate is top of mind for them as well.
According to Subplash, “An effective rate of 3% or less is great! If your effective rate is 3–4%, consider negotiating for a better processing rate or finding a lower-cost giving platform. If your effective rate is higher than 4%, make a change as soon as possible.”5
Pay special attention here…
Subsplash is making a clear distinction between an effective rate of 3% and 4%. In fact, according to Subsplash, that extra percent in effective rate warrants changing your provider as soon as possible.
The Nucleus Giving effective rate is 0.63%. So if a 1% in savings necessitates changing your provider as soon as possible? How about triple that?
Let’s talk about my bias
I’m aware that an article like this can come off as self-serving.
Obviously, I’m leading a company that has its own giving solution for churches that we’re passionate about.
The truth is, despite working in the world of church, and digital, and communications for close to a decade – I wasn’t aware of the problems of giving fees and rev-share until just a few years ago.
And in fact, it was that realization that motivated my team and me to build Nucleus Giving in the first place.
So on the one hand, you need intimate, behind-the-scenes knowledge of this industry to talk about it in-depth – which demands some kind of involvement yourself.
Moreover, describing a problem like this without working toward a solution yourself can come off as empty criticism. Kind of like a backseat driver.
And then finally, we’re working with thousands of churches at Nucleus. We’ve processed hundreds of millions of dollars in donations over the last few years. So we now have the data necessary to compare to the industry standard.
But without that data – without that first-person experience – you never really know for sure, right?
Bottom line:
I understand the optics. Talking about this stuff is always tricky. And whomever you’re currently using or will be using in the future as your church giving provider, my objective for a post like this is to offer you the knowledge that’s currently missing when most churches make these decisions.
Because the reality is that hundreds of millions of dollars in donations to churches are being needlessly lost every year to fees.
It’s preventable.
As for the solution? Refusing to participate in rev-share and providing an alternative option for churches is the motivation behind what we do at Nucleus.
And the impact a post like this can make will inevitably translate to millions of dollars in lost donations being reclaimed by churches to then be used for ministry. To affect real, life change.
So I know these conversations are never perfect. But they are necessary.
And irrespective of the giving platform you use….whether you use Nucleus currently, or in the future, or never – this information is equally important for all of us.
Changing giving providers
If you are motivated to begin exploring options for changing giving providers – we want to make that as easy as possible for you.
So here are a couple of important things to know:
- To talk with a real person at Nucleus, just click here
- If you decide to make the switch to Nucleus, consider paying annually – you’ll get two months free
- And make sure to download the Giving Fees Cheat Sheet here if you haven’t already – it makes for a handy reference and is easy to share with other folks on your team
Lastly, we know changing providers can be tricky. So we’re glad to add an extra 3 months free to your first year of Nucleus Giving.
Here’s what that looks like in practice:
Let’s say you signed up for a Nucleus Giving annual plan on November 1st, 2022. Normally, your renewal date would be November 1st, 2023 – the following year. Instead, with these extra 3 months of free time, your renewal date becomes 15 months after your initial signup date rather than 12.
So now, your renewal date would be February 1st, 2024. Combined with an annual plan already giving you 2 months free compared to our monthly costs – that translates to 15 months for the cost of 10 in your first year.
To claim this special pricing, just click the banner below:
Thanks as always for your time, attention, and trust. We’ll talk soon.