[dcaranda]

@korzun My name is Danny and I'm a co-founder of RaisedBy.Us. Thanks for your question!

Regarding the 3rd party issue: All donation methods (RaisedBy.Us or otherwise) involve a third party. Even when you go directly to a charity's website to make a donation, you will use a third party payment provider. The most common method is debit or credit card. This method actually involves multiple third parties that all take fees (an issuing bank, a merchant bank, a settlement bank and a network such as VISA, Mastercard, Discover, etc). This fee is called interchange and it typically inovlves a flat fee of 30 cents per transactions plus about 2.5% to 3% of the total value of the transaction. We thought this was pretty expensive. Donations through RaisedBy.Us charge 0% and no flat fee per transaction. We accomplish this by using a back-end provider that settles transactions with charities using checks and ACH methods (which are much cheaper the credit and debit transactions) and we charge the companies (not the donors) to access the service.

Regarding tax write off: RaisedBy.Us does not get a tax write-off for the donations that are processed through our program. Only the initial donor (e.g., an employee at one of our participating companies) gets a tax write-off for donations.

[korzun]

I'm aware of processing fees, to avoid it you can simply cut a check or do a bank transfer from your personal account when donating.

But I'm also pretty sure a non-profit can write off processing fees so it's not really an issue.

How would the employee get tax write off if the money is send to your company which is not registered as 501(c)?

For example if you claim a deduction on your taxes and get audited, would IRS be cool with 'I send money to XYZ which is not a 501(c) but they send it to actual charity, I swear'.

Offering receipt of donation to every company employee would work (I think), but I'm not sure if you are doing that?

[dcaranda]

Every employee gets a receipt of how much they donated to which charities. Their donation also shows up in their year end paystub and W-2, both of which can be used in their tax returns.

On fees, it's typically just the network fee (e.g., Mastercard) that gets waived. The issuing bank, acquiring bank and the processor, still take a cut.

Bank transfers have too much friction. You wouldn't pay your corner store with a bank transfer. You'd rather swipe a card. It's why you carry around your bank card (which as a VISA or MC logo). You wouldn't pay for something on eBay with a bank transfer. You'd use PayPal. An interesting point is that both PayPal, VISA and Mastercard on the bank-end are really just a series of bank transfers wrapped with a more refined consumer/merchant interface (card / POS terminal).

[korzun]

Gotcha, that's for clarifying it. With receipts this makes way more sense :)