The Challenge
Rebecca H. is the executive director of a regional nonprofit that provides housing assistance, job training, and family support services in central Ohio. The organization processes approximately $620,000 in annual donations through card payments — a mix of online donations through their website, recurring monthly donor charges, event-based donations at galas and fundraisers, and in-person gifts at the organization's offices.
The nonprofit was using a well-known donation platform that charged a flat rate of 2.9% + $0.30 per transaction, plus a 0.8% platform fee on top. The all-in cost was effectively 3.7% + $0.30 per donation. On $620,000 in annual donations, the organization was paying approximately $29,700 per year in processing and platform fees — money that came directly out of program funding.
The recurring donor program was also underperforming. The organization had 340 monthly donors, but 15–20 donors churned each month due to failed charges — primarily expired cards and closed accounts. Staff spent significant time reaching out to lapsed donors, but recovery rates were low. Each lost recurring donor represented $50–$150 per month in ongoing revenue that was difficult to replace.
Event-day donation processing was another pain point. At the organization's annual gala — which typically raises $80,000–$100,000 in a single evening — the donation platform's standard funding timeline meant the organization waited 5–7 business days to receive the funds. For a nonprofit managing tight cash flow, the delay created unnecessary financial stress during their busiest fundraising period.
“Every dollar we save on processing goes directly to our programs. PaySec's nonprofit rate structure and transparent pricing freed up $9,200 that now funds direct services.”
— Rebecca H., Executive Director, Regional Nonprofit
The Solution
PaySec set up a dedicated nonprofit merchant account with Network Offset Pricing, eliminating the layered platform fees. Instead of 2.9% + 0.8% + $0.30, the nonprofit now pays interchange passthrough plus a fixed per-transaction margin. For nonprofits, this pricing model is particularly advantageous: many card networks offer reduced interchange rates for registered charities, and those savings pass directly through to the organization under interchange passthrough pricing.
PaySec integrated with the nonprofit's existing website through a hosted donation page that maintains the organization's branding. Online donors see a seamless experience — the donation form matches the site's design — while the processing routes through PaySec's gateway at the lower interchange-passthrough rate. The donation page supports one-time and recurring donations, custom amounts, and designated fund allocation.
For the recurring donor program, PaySec deployed its automatic card updater and donor self-service portal. The card updater proactively detects when a donor's card has been reissued and updates the stored token before the next charge attempt. The self-service portal allows donors to update their own payment information, change donation amounts, or modify schedules without calling the office.
For events, PaySec provided wireless terminals with next-day funding. Donations processed at the annual gala and other fundraising events are deposited into the nonprofit's account the following business day, improving cash flow during the organization's most important fundraising moments.
“Our annual gala is our biggest fundraising event. PaySec's event-day terminals and next-day funding meant we had access to those donations immediately instead of waiting a week.”
— Rebecca H., Executive Director, Regional Nonprofit
The Results
The switch to Network Offset Pricing reduced the nonprofit's effective processing rate from 3.7% to approximately 2.55% — a 31% reduction in total processing costs. Over the first 12 months, the organization saved approximately $9,200 in processing fees — funding that was redirected to direct program services.
The savings came from two sources. First, the elimination of the 0.8% platform fee that had been layered on top of processing costs. Second, the nonprofit's qualification for reduced charity interchange rates under the card networks' nonprofit programs. Under the previous platform's flat rate, these reduced interchange rates provided no benefit to the organization — the platform kept the difference. Under interchange passthrough, the savings flow directly through.
The recurring donor program saw the most dramatic improvement. Monthly donor churn due to failed payments dropped from 15–20 donors per month to 3–5, and the overall recurring donor retention rate increased to 94%. The automatic card updater prevented the majority of would-be failures, and the donor self-service portal gave donors an easy way to resolve issues without staff intervention. The organization estimates the improved retention preserved approximately $36,000 in annual recurring donation revenue.
Next-day funding for event donations improved the organization's cash flow management during fundraising periods. The annual gala proceeds — approximately $92,000 — were deposited the following business day instead of the previous 5–7 day wait. Staff time spent on donor payment issues dropped by approximately 8 hours per month.
“The recurring donor management was exactly what we needed. Monthly donors can update their own payment info, and we get notified automatically when a card is about to expire.”
— Rebecca H., Executive Director, Regional Nonprofit
Disclaimer: Results are based on this organization's specific donation volume, payment mix, and prior pricing structure. Individual savings vary. The 31% fee reduction reflects the difference between the organization's prior all-in rate and their PaySec effective rate over the first 12 months. Nonprofit interchange rates require registration with card networks. Donor retention improvements depend on donor demographics and giving patterns. PaySec does not guarantee specific savings percentages or retention rates.