They make philanthropy easy, but our survey finds many have large fees
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What to give the person who already has everything? You might want to indulge their charitable streak by giving a charity gift card that lets them steer some dollars toward noble causes, such as feeding the poor or rescuing animals.
These cards look like traditional gift cards, but work a little differently. Nonprofit organizations offer these cards and the giver can choose an amount that can range from $10 to $5,000 or more. The gift card is sent by mail or as an emailed e-gift card, and then the recipient gets to pick a charity from a preselected list and the money is sent to that group.
This year, CreditCards.com surveyed six prominent charity gift cards that offer a range of charities from which to choose: TisBest, CharityChoice, the JustGive GiveNow Card, the Network for Good Good Card, the GlobalGiving Gift Card and the Gift of Giving Gift Card. (See chart below, “Compare 6 charity gift cards.”)
Our survey found most card providers charge a flat fee for a plastic card, ranging from 50 cents to $5, plus a percentage for processing, ranging from 3 to 8 percent (Network for Good charges a flat fee of $5 and no percentage, while GlobalGiving charges 15 percent and no fee). These fees cover the cost of the card and processing. Depending on the amount of the gift card, these fees can eat up anywhere from a little over 3 percent of the total to a whopping 50 percent or more.
Despite the sometimes-hefty fees, experts say these cards can make good holiday gifts.
Charity gift cards also provide a way to make the gift of a charitable donation more tangible, says Charlene Davis, a professor of marketing who does research on charitable giving at Trinity University in San Antonio, Texas.
Wrapping and presenting charity gift cards can feel more substantial than just notifying recipients that donations were made in their names, she says.
Charity gift cards: The pros
Charity gift cards offer benefits to the giver, the receiver and the charitable organization, backers say. Here are four pluses of philanthropic plastic:
- Give and you shall receive a tax break. When you buy a charity gift card, your purchase is considered a donation to charity, so you typically get a letter or a receipt that you can file away until tax time. Usually the person who purchases the gift, not the recipient, can take the tax deduction, says Sandra Miniutti, vice president of marketing and chief financial officer for Charity Navigator, an independent charity evaluator.
- The recipient gets to allocate the money. As an alternative to donations that you make on behalf of someone else wherein you designate the charity, these gift cards allow the recipient to select the organization or cause that is most important to him or her.
Being able to tailor it with your own design makes it seems a little more thoughtful.
|— Charlene Davis|
- You can personalize the gift. Most organizations offering charity gift cards will, at a minimum, allow you to choose from several card designs. And others let you upload your own artwork or photo to make the card even more personal. “Being able to tailor it with your own design makes it seems a little more thoughtful,” Davis says. This also makes it a worthwhile idea for business gifts, since some of the cards can be branded with a company logo.
- The recipient might have to do less pre-donation legwork. You should always do your homework before donating to a charity, Miniutti says. But that might be a little easier for card recipients because some organizations that offer charity gift cards research nonprofits before including them in their lists, she says. For example, TisBest Philanthropy reviews each charity’s 990 form, the tax return filed each year with the IRS, which gives information about CEO pay and the amount of money spent on programs. TisBest also checks information from evaluators such as Charity Navigator and GuideStar.
Charitable gift cards can have some downsides, others note. Before pulling out your credit card, consider these four cons:
- Not all the money goes to charity. If you donate directly to a nonprofit organization in a loved one’s name, 100 percent of the funds go to the good cause. That’s not the case with charity gift cards, where a middleman skims fees off the top. There’s typically a plastic card fee, which covers the cost of the card itself plus postage and handling, plus an additional percentage for administrative costs and credit card processing. Those fees add up, and can take some of the joy out of giving, experts say. “The fee issue is a significant one,” Davis says. “That’s true for any gift card, but it rubs even more when it’s a charitable card.”
- Some cards expire. It’s inevitable: In the flurry of holiday activity, people sometimes misplace or forget about their gift cards. So, what if your recipient stashes the gift card in a drawer and finds it in a year? With some cards, it might be too late to donate that money to a good cause. Before you buy a card, you should also check to see if there’s an expiration date, experts say. “Some cards have a relatively short shelf life, a year or less,” Davis says.
- You probably can’t snag one in the checkout line. If you need a last-minute gift for that ugly holiday sweater party, it’s hard to beat the convenience of running into a store to grab a gift card. But charitable gift cards are not as widely available as other gift cards, so consumers have to actively seek them out and buy them ahead of time online if they want plastic to wrap, Davis says. She says nonprofit organizations haven’t pushed these cards as much as she had anticipated they would when the cards first came out several years ago. “Every other kind of gift card is so easy to get your hands on,” she says. “You can go to any grocery store, drugstore or convenience store.”
- Smaller charities may not be included. Though several major charities are represented by these organizations, some smaller or hyperlocal charities to which your gift recipients may wish to donate may not be. Consider whether this would be a drawback for your intended recipient.
Read the fine print
So, how do you make smart choices when it comes to charity gift cards?
First, read the terms and conditions closely, experts warn. “People purchasing charity gift cards need to make sure they understand all the costs involved,” Miniutti says. Davis recommends looking at both the grand total of the fees and the amount you plan to spend. A $5 flat fee might seem reasonable if you’re buying a $100 gift card, but could be a reason to nix your purchase if you were only planning to spend $10, she says. And don’t forget to add in shipping costs if you are purchasing a plastic gift card.
Our survey found that, in order to see which provider will offer you the best deal, you have to crunch the numbers based on the amount you plan to spend-and don’t forget to factor in any shipping costs on top of the amount of your gift card (some companies charge, some don’t). Assuming you want to order a company-mailed plastic or printed card, here is the cost breakdown.
For a $10 gift card:
- GlobalGiving: Charges a flat 15 percent fee and no shipping, sends $8.50 out of your $10 gift to charity, 85 percent.
- TisBest: Charges $2.25 in fees, plus $1.49 for plastic cards. Your total gift cost is $11.49, and $7.75 goes to charity, 67 percent.
- Just Give: Charges 80 cents in fees. If you are mailing a card, you’ll also have to pay $5 for shipping. Your total gift cost for the mailed card is $15, with $9.20 going to charity, or about 61 percent of your total gift cost.
- Charity Choice: Charges $1.30 in fees. You’ll also pay $4.95 per order, so your total gift charge is $14.95, with $8.70 going to charity (58 percent).
- Network for Good (which only offers an ecard or print-your-own option): Charges a flat $5 handling fee per card, so on your $10 gift, $5 goes to charity, or 50 percent.
- The Gift of Giving Card: Charges $5.25 in fees, in addition to a $3 printed gift card fee. Your total gift cost is $13, and $4.75 goes to charity (37 percent).
For a $50 gift card:
- TisBest: Charges $3.45 in fees plus $1.95 for a plastic card. Your total gift cost is $51.95, with $46.55, or 93 percent of your total gift cost, going to charity.
- Network for Good (again, only an ecard or print-your-own): Charges $5, so $45 of your $50 gift goes to charity, 90 percent of your total gift cost.
- JustGive: Charges $2.60 in fees plus $5 for the mailed card. Your total gift cost is $55 for a $50 gift card, and $47.40 is given to charity, 86 percent.
- GlobalGiving: Your total gift cost is $50. The company charges $7.50 in fees, and sends $42.50 to charity, 85 percent.
- Charity Choice: Charges $4.50 in fees on your $50 gift plus a $4.95 shipping fee, making your total gift cost $54.95, with $45.50 going to charity, about 83 percent.
- The Gift of Giving Card: Includes $6.45 in fees on a $50 gift, plus a $3 fee per printed card. Your total gift cost is $53, with $43.55 going to charity. That’s 82 percent of your total gift cost.
For a $200 gift card:
- Network for Good (ecard or print-your-own): Charges $5, so $195 of your $200 gift goes to charity, 98 percent.
- TisBest: Charges $7.95 in fees on your $200 gift, and it’s $1.95 extra for plastic. Your total gift cost is $201.95, and $192.05, or 96 percent of your total gift cost, goes to charity.
- JustGive: Charges $9.35 on your $200 gift, plus a $4.95 shipping fee. Your total gift cost is $204.95, with $190.65 going to charity. That’s 95 percent of your total gift cost.
- The Gift of Giving Card: Charges $10.95 in fees, in addition to a $3 fee per printed card. Your total gift cost is $203, with $189.05 going to charity, or 93 percent.
- Charity Choice charges $16.50 in fees on your $200 gift, plus a $4.95 shipping fee. Your total gift cost is $204.95, with $183.50 going to charity, 92 percent of your gift cost.
- GlobalGiving: Your total cost is $200. The company charges $30 in fees and sends $170 to charity, 85 percent.
Mind expiration dates, too
In addition to looking closely at fees, it’s important to find out if the card has an expiration date. At the very least, you should know the expiration date when you give the gift, Davis says: “That way, you can encourage [the recipient] to use it sooner rather than later.”
It’s a good idea to look at the list of charities from which your recipient will be able to choose. One organization that sells gift cards might have a list of just a few hundred charities, while another might have thousands of groups that can receive donations by gift card.
Some charity gift card groups focus on large, national charities, others include many local organizations. GlobalGiving has an ever-changing list of “projects” all over the world. For example, a recipient could choose to provide meals for underprivileged children in India, purchase school supplies and books for kids in Argentina or fund community building programs in Israel.
This type of specificity can really appeal to a gift card recipient, Davis says, because many people who give to charity like to see exactly how their donation is making a difference. She says: “Then they get to not only choose the charity, but narrow it down to a specific project that is near and dear to their heart.”
|COMPARE 6 CHARITY GIFT CARDS|
|Charity Choice||Global Giving Gift Card||JustGive GiveNow Card||The Gift of Giving Gift Card||Network for Good GoodCard||TisBest|
|Number of charities||1,000+||More than 5,000 “projects” in 20 categories||2 million||100+||1 million+||350+|
|Types of card||Plastic, e-card or printable card||Biodegradable plastic, e-card or printable card||E-card, printable card or gift card claim code||Plastic, e-card or printable card||E-card or printable||Recycled plastic, e-card or printable gift certificate|
|Purchase cost||$0.50 per card plus 5% administrative fee and 3% credit card processing fee. Shipping: $4.95 per order||$0 for card plus 15% administrative fee||$5 for every company-printed and mailed 4×5-inch card; $2 fee for each Email Charity Gift Card, Print-At-Home Charity Gift Card or Charity Gift Card Claim Code. 4.5% processing fee plus a $0.35 flat fee per donation||$4.95 transaction fee and 3% credit card processing fee. Shipping: $3 per printed gift card||$5 handling fee per card||$1.49 for plastic cards to cover cost of card; plus $1.95 transaction fee and 3% credit card processing fee. Shipping: free|
|Yes, at no extra charge||You can choose from nine card designs||Yes, you can choose an image or upload your own at no extra cost||No||No||Yes, you can choose a card image or provide your own at no extra charge|
|Expires?||No||Yes, one year after purchase||Yes, after one year||Yes, one year after purchase||Yes, six months after purchase||No|
|Number of charities||1,000+|
|Type of card||Plastic, e-card or printable card|
|Purchase cost||$0.50 per card plus 5% administrative fee and 3% credit card processing fee. Shipping: $4.95 per order|
|Yes, at no extra charge|
|Global Giving Gift Card|
|Number of charities||More than 5,000 “projects” in 20 categories|
|Type of card||Biodegradable plastic, e-card or printable card|
|Purchase cost||$0 for card plus 15% administrative fee|
|You can choose from nine card designs|
|Expires?||Yes, one year after purchase|
|JustGive GiveNow Card|
|Number of charities||2 million|
|Type of card||E-card, printable card or gift card claim code|
|Purchase cost||$5 for every company-printed and mailed 4×5-inch card; $2 fee for each Email Charity Gift Card, Print-At-Home Charity Gift Card or Charity Gift Card Claim Code. 4.5% processing fee plus a $0.35 flat fee per donation|
|Yes, you can choose an image or upload your own at no extra cost|
|Expires?||Yes, after one year|
|The Gift of Giving Gift Card|
|Number of charities||100+|
|Type of card||Plastic, e-card or printable card|
|Purchase cost||$4.95 transaction fee and 3% credit card processing fee, Shipping: $3 per printed gift card|
|Expires?||Yes, one year after purchase|
|Network for Good GoodCard|
|Number of charities||1 million+|
|Type of card||E-card or printable|
|Purchase cost||$5 handling fee per card|
|Expires?||Yes, six months after purchase|
|Number of charities||350+|
|Type of card||Recycled plastic, e-card or printable gift certificate|
|Purchase cost||$1.49 for plastic cards to cover cost of card; plus $1.95 transaction fee and 3% credit card processing fee. Shipping free|
|Yes, you can choose a card image or provide your own at no extra charge|