Surcharging - GoFundMe Edition
Several years ago I wrote an article on how to charge just the right amount to cover the fees Square charges merchants. Today I wanted to donate to a controversial GoFundMe campaign an old friend of mine posted. I thought about donating exactly the right amount to afford him a 1 month bus pass, but I knew that to do that I'd have to account for whatever fees GoFundMe charges. I got this.
GoFundMe charges a flat 7.9% fee + 30¢ per donation as of this post, so let's say you want to give someone $100 but you want to cover the fees for them. How do you arrive at the correct donation?
You could add 7.9% + 30¢ to arrive at $108.20... um $109 (they only do whole dollar amounts), but when GoFundMe takes their cut your donee gets $100.09. That's super boring. Rounding to the nearest dollar really simplifies things! So let's pretend they take pennies so we can do some math.
We're looking for the value x such that x-x*7.9%-0.30=y where y is the
amount you want to end up with. Simplify that using algebra and you get
x=(y+0.30)/(1-7.9%) or rather x=(y+0.30)/92.1%. For you folks without a %
on your calculator that's x=(y+0.30)/0.921.
It's easy enough to see how to generalize the solution, so instead here's a form to help you calculate the right amount.
$42