I recently learned from Blackbaud Support that Online Giving does not process donor covered transactions using the fee rates that are documented in the Blackbaud Merchant Services Processing Fees page of their website.

According to How is the fee rate and net amount calculated for transactions when a donor covers the fees? and What is the difference between Complete Cover/Blackbaud pays, Donor Cover, and My organization pays?, this is because the donor is presented with the option to cover processing fees and prompted to enter their credit card information during the same step in the Blackbaud Checkout process. Because of this, Blackbaud Merchant Services does not know the card type being used to pay for the donation, which is necessary for determining which processing fee rate should be applied to the transaction.

Since Blackbaud Merchant Services does not know the card type being used for the transaction during this step, Blackbaud is using the following formula to calculate the total transaction amount for the donor covered donation:

(Donation Amount + $0.30)/.965

For example, a $10.00 donor covered transaction via Online Giving is calculated as follows:

($10.00 + $0.30)/.965 = $10.67

If the donor covered donation is an American Express transaction, then Blackbaud disburses the donation amount to the organization's bank account and collects the remaining amount as the processing fee.

For example, a $10.00 donor covered transaction via Online Giving is $10.67. For this transaction, Blackbaud disburses $10.00 to the organization's bank account and collects $0.67 as the processing fee.

If the donor covered donation is a non-American Express transaction, then Blackbaud will use the following formula to calculate the processing fee they collect and disburse the remaining balance to the organization's bank:

(Donation Amount*0.0299) + $0.30.

For example, a $10.00 transaction via Online Giving is $10.67. For this transaction, Blackbaud disburses $10.07 to the organization's bank account and collects $0.60 as the processing fee.

This makes reconciling very difficult for organizations because Blackbaud disburses the net amount of the transaction into the organization's bank but if the transaction is a donor covered and non-American Express transaction and the donation form is configured to designate the processing fees of the transaction to a specific fund (which I'd imagine is common practice amongst organizations), then the amount designated to the processing fees-specific fund does not match the fee amount of the transaction in the Blackbaud Merchant Services Portal.

For example, using the same $10.00 donor covered transaction, the total transaction amount is $10.67. Blackbaud Merchant Services collects $0.60 as the processing fee and disburses $10.07 to the organization's bank account. In Raiser's Edge, the gift record appears with the following gift split:

• Total Gift Amount: $10.67

• Fund selected on the form: $10.00

• Fund configured in Settings>Donor cover designation: $0.67

So even if the user filters out the processing fees fund from their query/report/export parameters, the currency metrics in their query/report/export will not match what the organization sees in their bank statements or any of the transaction lists/reports or disbursement reports in the Blackbaud Merchant Services portal.

The only way to work around this is to manually update the split information on the gift records after committing the batches in web view, which is a lot of unnecessary work.

While I understand that Blackbaud's logic is that the donor donated $10.67 with the intention of $0.67 being used to cover the payment processing fees of the donation, there are organizations who consider the net amount of the transaction as the actual gift amount from the donor, even if the donor isn't aware that their donation's processing fees were less than $0.67.

This is problematic for organizations whose operational procedures follow this logic because the donor is getting confirmation emails and receipts that do not accurately reflect the actual donation amount. While eReceipts can be disabled on donation forms, confirmation emails and screens can't, so there's no workaround to prevent the donor from receiving correspondence with the "incorrect gift amount".