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I’m in the habit of donating $1 a month to everything I come across that seems useful to me and that accepts recurring monthly donations , Patreon style. But I

I’m in the habit of donating $1 a month to everything I come across that seems useful to me and that accepts recurring monthly donations , Patreon style. But I had to donate a minimum of $5 for my donation to be accepted. I wonder why they set a minimum amount. Confusion? Greed? Regulatory or practicality issues?

gtaylor 8y ago
Depending on payment processor and any volume discounts (or lack thereof) it is sometimes not worth getting less than a couple bucks. $5 sounds high as a minimum, though.
seotut2 8y ago
I imagine there are some overheads (payment processing, taxes, accounting etc?) that make donations below $5 less useful.
0xferruccio 8y ago
Payment processors love you if you make 12 unique 1$ payments.. They're likely taking around 25% of your donations. One of the reasons we don't have widespread micro payments is payment processor's fixed fees on small payments
nathancahill 8y ago
I manage online donations for a small non-profit. Amounts below $5 are significantly eaten by fees and overhead (getting worse as amounts approach $1). Please consider changing your giving to $12/year. Right now half of your money isn't going to the causes you're trying to support.
- JoeAltmaier 8y ago
  Huh. Patreon takes 5%; Paypal takes 1%. How does that eat up $5? I ask in order to find out.
  - grenoire 8y ago
    Flat base fees
  - nathancahill 8y ago
    Small volume CC processing is 2.9% + 30¢. For $1 that's 33¢. Another 10-15¢ in overhead with accounting, sending tax-deductible receipts, etc. Little things add up. In the above example: 12 donations of $1/month: organization sees about $6.50. 1 donation of $12/year: organization sees about $11.20.
- per4 8y ago
  Do you guys accept crypto donations? Seems like they would solve the problem perfectly.
- augustl 8y ago
  That makes sense, I don't see why not. Patreon probably batches this for me. I end up paying $15-20 a month (and growing) to Patreon, then they distribute that to the individual content creators. (Except that I closed my Patreon account since they decided to get all arbitrary and political over the Sargon of Akkad thing, but I suppose a good alternative will prop up eventually, which is why I'm looking into donating directly to the source)
vortico 8y ago
In addition to payment processing fees, there is some small accounting effort and liability risks for each donation. To see how this is true, imagine that 10,000 people donate $1 to a cause per year. (This is purposely a huge overestimate for an organization like arXiv, who I'd guess will only attract 50-200 donors.) It will then be likely that 0.1-1% (10-100) of people will cause some sort of trouble due to the donation such as - creating complications on social media because they claim they have some stake in your project - requesting custom legal documents to prove that their donation is tax-refundable (ridiculous for such a small amount, but people still do it, especially if the donation comes from a bureaucracy machine) - asking for refunds - arguing when you say the policy disallows refunds - considering your organization a paid service and asking for special technical support - thinking of an organization as having less moral standards due to the idea that it has lots of money All of this becomes difficult to handle for a single part-time employee funded at $8,000/yr by those $1 donations. From experience, all of this happens to charities. Even if you don't believe it, the fear of these risks is often greater than the salary earned by it. This is due to the unwritten law that "all transactions have a minimum and unavoidable customer support cost." At around $5, the above risks suddenly become worth the salary.
- gpm 8y ago
  All of those costs sounds like they scale with the number of donors. Not the number of donations a fixed number of donors make.
  - grogenaut 8y ago
    Employees are a step function not linear
  - vortico 8y ago
    Correct. The reason I wrote 10,000 users is to assign a concrete number of people (10-100) to the probability (0.1-1%) and assign a salary to it.
Havoc 8y ago
Sucks that you're getting so much flak for this comment. At least you're actively donating...
- adtac 8y ago
  I don't think anyone is criticising them. They're offering constructive alternatives to improve their pattern to help them donate even more for the same amount.
  - Havoc 8y ago
    >I don't think anyone is criticising them. Agreed. None of it seems malicious. Overall I find hn to be quite quick on criticizing the technical implementation (fees paid math), without considering the reality of it: This guy is donating. Nobody that isn't has a right to criticize the mechanics in my eyes. And that's not me preaching - I consider myself to be on the wrong side of this fence :(

gtaylor 8y ago

Depending on payment processor and any volume discounts (or lack thereof) it is sometimes not worth getting less than a couple bucks. $5 sounds high as a minimum, though.

seotut2 8y ago

I imagine there are some overheads (payment processing, taxes, accounting etc?) that make donations below $5 less useful.

0xferruccio 8y ago

Payment processors love you if you make 12 unique 1$ payments.. They're likely taking around 25% of your donations. One of the reasons we don't have widespread micro payments is payment processor's fixed fees on small payments

nathancahill 8y ago

I manage online donations for a small non-profit. Amounts below $5 are significantly eaten by fees and overhead (getting worse as amounts approach $1). Please consider changing your giving to $12/year. Right now half of your money isn't going to the causes you're trying to support.

JoeAltmaier 8y ago
Huh. Patreon takes 5%; Paypal takes 1%. How does that eat up $5? I ask in order to find out.
- grenoire 8y ago
  Flat base fees
- nathancahill 8y ago
  Small volume CC processing is 2.9% + 30¢. For $1 that's 33¢. Another 10-15¢ in overhead with accounting, sending tax-deductible receipts, etc. Little things add up. In the above example: 12 donations of $1/month: organization sees about $6.50. 1 donation of $12/year: organization sees about $11.20.
per4 8y ago
Do you guys accept crypto donations? Seems like they would solve the problem perfectly.
augustl 8y ago
That makes sense, I don't see why not. Patreon probably batches this for me. I end up paying $15-20 a month (and growing) to Patreon, then they distribute that to the individual content creators. (Except that I closed my Patreon account since they decided to get all arbitrary and political over the Sargon of Akkad thing, but I suppose a good alternative will prop up eventually, which is why I'm looking into donating directly to the source)

vortico 8y ago

In addition to payment processing fees, there is some small accounting effort and liability risks for each donation. To see how this is true, imagine that 10,000 people donate $1 to a cause per year. (This is purposely a huge overestimate for an organization like arXiv, who I'd guess will only attract 50-200 donors.) It will then be likely that 0.1-1% (10-100) of people will cause some sort of trouble due to the donation such as - creating complications on social media because they claim they have some stake in your project - requesting custom legal documents to prove that their donation is tax-refundable (ridiculous for such a small amount, but people still do it, especially if the donation comes from a bureaucracy machine) - asking for refunds - arguing when you say the policy disallows refunds - considering your organization a paid service and asking for special technical support - thinking of an organization as having less moral standards due to the idea that it has lots of money All of this becomes difficult to handle for a single part-time employee funded at $8,000/yr by those $1 donations. From experience, all of this happens to charities. Even if you don't believe it, the fear of these risks is often greater than the salary earned by it. This is due to the unwritten law that "all transactions have a minimum and unavoidable customer support cost." At around $5, the above risks suddenly become worth the salary.

gpm 8y ago
All of those costs sounds like they scale with the number of donors. Not the number of donations a fixed number of donors make.
- grogenaut 8y ago
  Employees are a step function not linear
- vortico 8y ago
  Correct. The reason I wrote 10,000 users is to assign a concrete number of people (10-100) to the probability (0.1-1%) and assign a salary to it.

Havoc 8y ago

Sucks that you're getting so much flak for this comment. At least you're actively donating...

adtac 8y ago
I don't think anyone is criticising them. They're offering constructive alternatives to improve their pattern to help them donate even more for the same amount.
- Havoc 8y ago
  >I don't think anyone is criticising them. Agreed. None of it seems malicious. Overall I find hn to be quite quick on criticizing the technical implementation (fees paid math), without considering the reality of it: This guy is donating. Nobody that isn't has a right to criticize the mechanics in my eyes. And that's not me preaching - I consider myself to be on the wrong side of this fence :(