Non-Profit Credit Counseling. How do they get paid, and why are there fees?

Counseling agencies are non-profit, but they are not non-revenue.

Although Credit Counseling Companies are not for profit, they have the same operating expenses of any for-profit company, and like their clients, they have to make ends meet.

A Portion of a Credit Counseling Agency's revenue comes from "FAIRSHARE"

Fairshare is a percentage of payments paid through a DMP that are reimbursed by the creditor. Though each creditor's fareshare policies are different, the average amount of fareshare is currently 5.5%. In other words, for each dollar the agency sends to a creditor, they receive 5.5 cents back as a donation. As a contrast, fareshare was as high as 17% in the late 80's.

Credit Counseling Agencies Also Charge Fees

Typically a onetime setup fee and a monthly fee. The amount that they charge is regulated by state laws is most cases. There are still a few states that have no laws regarding how much an agency is allowed to charge.

In states where fees are now allowed, they ask for voluntary contributions. Running a business is expensive and fareshare doesn't cut it.

In addition to fareshare and fees, some counseling agencies also receive grants from government agencies and donations from businesses and community leaders.