2014-11-16

Fees When Donating Online to Canadian Political Parties

I just finished watching The Ides of March on Netflix Canada and I got in the mood to make a donation to a political party. Since I haven't waited until the last minute this year, I thought about sending a check so that none of my donation gets eaten up by merchant credit card fees (2.5 to 10%). Because of the tax credits, if you want to give $100, you give $400, to give $200 you need to give $600. Since 4% of $600 is $24, approximately 12% of a net (post tax credit) donation of $200 would go to the credit card processor.

But then I thought of the logistics involved in sending a check (finding my stamps and the envelopes that don't have the evaporated glue), and I realised sending a cheque was unlikely. Plus processing a cheque on the receiving end isn't free either. Someone has to open the envelope and enter data into a computer.

Thankfully, the NDP has a solution: eChecks. I did some reasearch and at worse, the NDP will pay 1% of my donation as a fee. More likely, the fee will be limited to less than $5. For me, that's the way to go. At most it will cost me 65 cents, and that is only if I'm over my 10 transaction per month limit on my $3.95 a month bank account. I won't get my 1% in donuts back that I would using my DoubleDouble CIBC credit card, but that is a sacrifice I am willing to make so that Trudeau or Harper don't win the next election.

By the way, you will need a routing number: 0XXXYYYYY (X= Bank number, Y= branch number). You can look it up if that explanation was too complicated.

The Liberals don't accept eChecks. They accept Paypal. That dramatically increases the fee to 1.9% (plus 30 cents), but at least it is cheaper for the party than credit cards.

The Conservatives? The Conservatives don't accept echeques or Paypal, but they do accept American Express. Amex has the highest merchant fees. At a minimum, 3.5% (probably more for Internet transactions). 

Hmm, I just realised that at the bottom of the NDP donation page, there is a link to "contribute via your bank account" and then you have the option to use Interact Online. My bank charges me $1.50 to use Interact Online, but as far as I know that is the cheapest method for the merchant. I'm not sure why they kind of hide that option, although perhaps it is because you can only use Interact Online if you use online banking with:
-BMO Bank of Montreal
-Envision Financial
-Libro Credit Union
-Scotiabank
-TD Canada Trust
-RBC Royal Bank

(So no CIBC, National, Laurentian or Desjardins.)

Neither the Conservatives nor the Liberals accept Interact Online. By the way, Permanent Residents can't vote, but they can donate

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