Cover the Fees is a great way for donors to shoulder the cost of the processing fees that are pulled from a transaction. When a donor chooses to cover the fees, their total gift is increased so their desired amount is what is deposited in the church's bank.
Because the fees are pulled out of the total transaction, the gift must be increased by an amount that is slightly larger than what the fee would be if the donor did not choose to cover the fees.
Let's use a gift of $75 on a VISA card as an example.
If the donor did not choose to cover the fees, the donor would be charged $75 and the church would receive a deposit for $72.53 ($75 - $2.48 (2.9% + $0.30)).
If the donor did choose to cover the fees, the donor would be charged $77.55 and the church would receive a deposit of $75 ($77.55 - $2.55 (2.9% + $0.30)).
As you can see, by the donor choosing to cover the fees, the fee is slightly higher ($2.55 vs $2.48). If we only added the original fee amount of $2.48 to the donor's gift, the processing fees on the increased gift would result in a net deposit of $74.93 ($77.48 - $2.55 (2.9% + $0.30)).
If you'd like to calculate what the total transaction might be if a donor chooses to cover the fees on a certain amount, you can use this formula:
(G + $0.30) / (1 - (P / 100)) *rounded up to nearest cent
G is the original gift amount
P is the % for the processing (2.9% for VISA/MC, 3.5% for AMEX, and 1% for ACH)
So for our example our example above:
($75 + $0.30) / (1 - (2.9 / 100)) = $77.55
In either scenario, with cover the fees or without, the donor's full amount given is treated as the gift. The fees are pulled from the gift as it is processed, and the net amount after fees is what is deposited into the church's bank.