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If one gives a donation to a charity by using a credit card, the charity will only end up getting a percentage of the actual funds (e.g. 98%). In such a case, does the person giving get "credit" for the full amount, or is it considered like he only donated the actual amount received?

(A similar case would be giving charity using foreign currency, where the charity then must do the conversion - generally at a loss)

(And yet another similar case from the past: if the collector takes a commission)

On one hand, he gave the full amount. The fact that the other party didn't receive all of it wasn't his fault.

On the other hand, the bottom line is that the charity didn't get it all.

The outcome of this would have two very important ramifications (i.e. practical applications) [well, probably more, but these are the two I could think of off-hand]:

  • How much of the donation can count as Maaser (מעשר) money?
  • If one has a choice between using a check or credit card, should he specifically use the check?

Additionally, would the halacha change if the person received an actual benefit from the credit card company's commission. For example, many credit card companies reward points, miles, and/or cashback for using the card. Technically, these rewards are funded using this commission...

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It seems like there should be a difference between overhead costs incurred by the giver and those incurred by the charity. That is, if I decide to use a credit card I'm causing them to not get the full amount so I wouldn't expect to count the 2%; if, on the other hand, the charity hires someone to run a campaign for them and that costs them some percentage, I didn't have any control over that so I would count the full amount. I don't have a source, which is why this is just a comment. –  Monica Cellio Dec 18 '11 at 19:43
    
Sometimes, nonprofit organizations can get substantially lower rates, because 1) they are effectively giving to charities, and 2) because charities have very low chargeback rates. –  McKay Mar 1 '12 at 18:54
    
@mckay yes, but less doesn't equal 0 –  yydl Mar 1 '12 at 19:52

2 Answers 2

I think (I'm not a rav) that the credit card charges is just like any other expenses the charity has. and you could deduct from ma'aser the full amount you gave.

Of course it's better if you can give with a check. That would save them a few dollars, making a bigger part of your donation go to the charity, but only if you don't have a fundraiser picking it up... If you do they'll end up paying more than the small credit card fee.

EDIT: Added a source... to support my answer.

Safer Tzduka U'meshpat צדקה ומשפט

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Source from where? –  Curiouser Sep 12 '11 at 14:34
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@Ezi, FYI, no one speaks on this site as a rav (although there are some people here who happen to have semicha). In general, the assumption is that any user's intuitive ruling, not backed up by a source, is worth little. Please consider describing in your own words what the source you quote is and what it says that's relevant to the question at hand. –  Isaac Moses Sep 12 '11 at 14:36
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Is there a difference between an expense the charity has no matter how you pay (e.g. mailing you a receipt) and an expense that follows from a decision you made? –  Monica Cellio Sep 12 '11 at 15:53
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Second @Isaac Moses' last point. Please summarize/translate the source for the benefit of those who cannot do so on their own, and please provide basic bibliographical information (author/book) of the source. –  Seth J Sep 12 '11 at 16:18
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There's a well-known tradition from ... I believe R' Yaakov Kaminetsky that a charity can have overhead as high as 49.9% and still be called a charity. I heard this in Rabbi Breitowitz's lecture on maaser, and then later on a rabbi Rakeffet mp3. –  Shalom Sep 19 '11 at 18:53

It's not always true that giving by check costs any given non-profit less than giving by credit card.

However you give, if it's a cause for which you / your rav feel comfortable using maaser money, then you can deduct the full amount of the gift.

Most donors don't like to think about the fact that some of their money goes towards "overhead". It does - and very very few non-profit entities can get around it.

Even if you hear that "100% of your donation will be used" for the stated cause - that only means that some major donor(s) gave them tens of thousands of dollars, and allowed them to use that money for the administrative costs, so that your $18 can go directly to the stated cause.

Any way you slice it, the beneficiaries of this non-profit would not receive anything, if the non-profit didn't also pay the office rent, the electric bill, the water bill, the fundraiser, the office staff, the cost of printing brochures, - and yes, the bank (checks), and the credit card processing company.

So give generously to your favorite causes, and deduct the full amount of your donation from your maaser obligations.

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While your answer explains nicely the overhead situation, do you have an halachic source for saying that maaser can pay for it? –  msh210 Dec 18 '11 at 15:56

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