Mapping How Donor Dollars Really Flow
tessera Perspective
Most donors assume that when they give $100 to a nonprofit, it goes directly to the cause. What is less visible is the path that money takes. A gift may move through card networks, banks, processors, or sponsoring institutions before it reaches the organization. At each step, rules and fees apply.
The nonprofit sector is not supported by one payment channel but many. Cards, ACH, digital wallets, donor-advised funds, checks, and wires all carry a share of the flow. Each comes with its own cost structure and risks. Together, they shape how much donor value truly arrives intact.
Checks and cash remain stubbornly high. Despite the growth of digital, studies indicate that 30 to 40 percent of donations are still made by check or cash (Blackbaud Institute, 2023). This share is especially strong among older donors and in religious giving. These channels avoid interchange fees but impose their own costs in staff time, reconciliation, and fraud exposure.
Cards dominate digital giving. Roughly 30 percent of donations flow through credit and debit cards. Donors favor them: the 2023 Global Trends in Giving Survey found that 63 percent of donors prefer to give by card online. Yet card giving is expensive. Interchange averages between 2 and 3 percent, and nonprofits run three to five points below commercial benchmarks for approvals (Visa and Mastercard data). Each decline is a donor willing to give but blocked by system friction.
Digital wallets are gaining ground. PayPal, Venmo, Apple Pay, and Google Pay now account for 10 to 15 percent of nonprofit transactions (Giving USA platform data). Younger donors in particular rely on wallets. The appeal is ease of use, but effective costs can exceed those of cards due to platform-specific fees layered on top of interchange.
ACH is efficient but underused. ACH represents about 10 percent of giving (AFP and Blackbaud benchmarks). Costs are a fraction of card rates, often just pennies per transaction. It is ideal for recurring gifts and major donations. Yet donors are less familiar with bank debits, and nonprofits often lack seamless tools to promote them.
Donor-advised funds are reshaping philanthropy. In 2023, $59.4 billion flowed into DAFs and $54.8 billion was granted to nonprofits (National Philanthropic Trust). These grants are typically disbursed by ACH or check. They reduce volatility for nonprofits but create dependency on a handful of sponsoring institutions.
Wires and international gifts matter most at the top end. While only five to ten percent of volume, the transaction sizes are significant. Cross-border fees and inflated FX spreads can cost nonprofits 100 to 250 basis points above network norms, draining substantial value from large overseas donations.
The channel mix is changing. Online giving now accounts for 12 percent of total U.S. giving, up from 8 percent a decade ago (Blackbaud Institute). Recurring programs are expanding. Younger donors overwhelmingly prefer digital-first methods. Wallets and ACH will continue to grow while checks decline, but the transition will be gradual. For now, nonprofits must manage across all streams at once.
Even marginal improvements matter. A one-point increase in card approval rates preserves hundreds of millions each year. Correcting MCC misclassifications prevents nonprofits from overpaying 25 to 100 basis points across billions in volume. Reducing inflated FX spreads saves high-value gifts from erosion.
Mapping how donor dollars actually flow reveals the quiet truth: fundraising is not only about inspiring generosity, it is about delivering it intact. Channel management has become a strategic priority. Optimizing the flow is as important as raising the gift in the first place.
Sources
Blackbaud Institute: Charitable Giving Report 2023
Nonprofit Tech for Good: Global Trends in Giving Survey 2023
National Philanthropic Trust: 2024 DAF Report
Giving USA 2024: Annual Report on Philanthropy