Using online platforms to collect money for your school or organization can be a great way to raise funds. However, it’s important to understand the business model of the platform you choose. Some platforms ask your donors to give them money in addition to the money they are giving you. This is called a tip-based model.

Tip-based models can be a great deal for you, nothing to pay upfront and you are promised the full amount of the donation. You have already asked your donor to generously donate to your cause and then the donation form sticks out its hand and asks for a “tip”, usually a percentage of the donation. These tips are typically on by default, so there is also a risk that the donor checks out quickly and later notices the tip, leaving them feeling cheated.

Tipping has become a complicated thing in the modern world. What was once money given for great service to an individual has now become a way for companies to make more money off of the generosity of others.

When you are asking for donations, you are asking for money to help a student or a group of students. You are asking for money to help a cause. You are not asking for money to help a for-profit company.

When you are choosing a platform to help you collect donations, make sure you understand the business model. If the platform is asking for a tip, they are asking for your donors to give them money. This can be a turn off for donors when what they really want to do is give money for a student and their welfare, not the for-profit company helping process the transaction.

Tipping can also hurt follow on requests. If the donor is annoyed by the automated platform asking for a tip, they may be less likely to donate to your cause in the future.