What it is
Crowdfunding fees are the costs that come with collecting money online. Usually that means a platform fee taken from each donation, and sometimes other costs depending on the service. Knowing what you will keep from each gift helps you set a realistic goal.
On 2A Support, the platform fee is 6% per donation. Payouts are sent on the 15th for the prior calendar month. There are three plans: Free, Grow at $99 per month, and Done-for-you outreach at $1,500 per month.
Taxes and rules are a separate layer. Questions include whether donors can deduct a gift, whether funds raised count as income, whether a payment form like Form 1099-K may come into play, and whether your state requires charitable solicitation registration. The answers depend on who is raising money, for what purpose, and where.
How it’s traditionally been approached
Traditionally, groups raised money through mailed appeals, dinners, club dues, raffles and passing a hat at events. Costs were things like printing, venue rentals and volunteer time, and the money was often handled by a treasurer or committee.
Online fundraising moved much of that to the internet. Instead of one-time event costs, platforms commonly charge a percentage of each gift, a subscription, or both. People compare these structures based on how often they expect to fundraise and how much support they want.
On taxes, people have usually relied on a bookkeeper, accountant or attorney, especially for questions about nonprofit status, reporting and state registration. Many organizers still do, because the right answer can change with the situation.
How the right organizer may help
The right organizer may help you turn these questions into a simple plan. They may walk through how the 6% platform fee affects your goal, how the payout schedule fits your timeline, and which plan suits your needs, without promising any particular result.
A first conversation is usually a friendly walk-through of your cause, your audience and your timeline. Expect questions about who is collecting the funds, what they will be used for, and whether a registered charity is involved.
Good questions to ask include: What will I net after fees? When will funds reach me? Who is responsible for tax reporting? Do I need charitable solicitation registration in my state? Are there raffle, gaming or legal-defense-fund rules I should check? An organizer can point you to the right resources, and a qualified tax or legal professional can give advice for your situation.
The bigger picture
Money questions can create stress, especially when you are raising funds for something you care about. Knowing the fee, the payout date and the basic tax questions ahead of time can bring real peace of mind and let you focus on your story and your community.
Taking a whole-person view means planning for your finances and your energy too. If you want help finding professionals who support overall wellbeing, Providers.plus may be a useful place to look. There is no single right approach, and asking for help is a sign of good planning.
Keep in mind
- Donations are not automatically tax-deductible. Only gifts to IRS-registered charities may be, and you can check a group's status with the IRS Tax Exempt Organization Search.
- Whether funds raised count as taxable income depends on your situation, so talk with a qualified tax professional.
- Charitable solicitation registration, raffle and gaming rules, and legal-defense-fund rules vary by state, so check your state's rules and consult a qualified professional.
- 2A Support is an independent directory, not a professional advisor, and organizers may help but cannot guarantee outcomes.
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Organizer types
Frequently asked questions
How do crowdfunding fees work?
Crowdfunding fees are the costs of collecting money through an online fundraising platform, often a percentage of each donation plus any plan or subscription cost. On 2A Support, the platform fee is 6% per donation, and plans are Free, Grow at $99 per month, and Done-for-you outreach at $1,500 per month. Always review the current terms before you launch.
What is the fundraising platform payout schedule on 2A Support?
Payouts are made on the 15th for the prior calendar month. For example, funds from one month are scheduled for payout on the 15th of the next month. Plan your timeline around this schedule if you have deadlines.
Are crowdfunding donations tax deductible?
Not automatically. Only gifts to IRS-registered charities may be tax-deductible, and even then it depends on the donor's situation. You can check a group's status with the IRS Tax Exempt Organization Search and ask a qualified tax professional.
Are crowdfunding donations taxable income?
It depends on who receives the money, why it was raised and how it is used. Some funds may be treated differently from others, so this is a question for a qualified tax professional. Keeping clear records of what you raise and spend can make that conversation easier.
Do I need to worry about Form 1099-K for fundraising?
Possibly, depending on how payments are processed and your circumstances. Form 1099-K is a payment reporting form, and whether you receive one can vary. A tax professional can explain how it applies to you and what to do with it.
Do I need charitable solicitation registration to fundraise?
It depends on your state and on who is raising the money and why. Charitable solicitation registration rules vary by state, and raffle, gaming and legal-defense-fund rules can differ too. Check your state's requirements and speak with a qualified professional before you launch.
Educational resource. 2A Support shares general information and connects people with independent organizers. It is not professional advice. Talk with a qualified professional about your own situation.