How should donor-covered fees be reported by our business office?
When donors cover processing fees on behalf of the school or institution, we recommend that your business office includes the covered fees in the donation amount. For example, if:
Your business office should report that:
This method of reporting simplifies the logic for your business office since Alice’s donation is reported the same as other online payments where donors do not cover the fees.
Another benefit of this accounting method is that the entirety of your donor’s payment becomes tax-deductible! So, be sure to reference the full amount paid by the donor in their acknowledgment letter.