Not all fundraising sites were created equal
Published by Kieron James in Wonderful
Comparing apples with apples
All fundraising websites are the same, right? They all allow charities' supporters a means of creating fundraising pages and provide their sponsors with an easy way to donate. They all promote sharing on social media and they all prompt donors to check the Gift Aid box. What's more, they do all of this far more efficiently and effectively than charities would if left to their own devices. So, is there really a problem with charities paying for the convenience?
As we see it, there are several problems
All fundraising websites weren't created equal. Some are run for-profit. This isn't a criticism in and of itself. However, 80% of users of the largest for-profit platform (fundraisers and their sponsors) are unaware that it is for-profit. [Download Survey Results - 1,000 UK participants]
Some platforms use a chunk of Gift Aid - a scheme enabling charities to reclaim tax on donations - to fund their bottom line. Worth reading that one again. Gift Aid is not a scheme created to meet the very different needs of company shareholders. It is our view that Gift Aid should be used exclusively to support the work of charities. We understand that charities have costs, but some can be avoided, or at least, reduced.
Fundraising platforms which claim to cover costs by charging the donor rather than the charity are simply 'spinning' their offer. If a £10 donation results in my debit card being charged £10.50, then 50p - which I'd rather went to the charity - is being diverted to the platform's bottom line. Put another way, if I can only spare £10 to support the fundraiser / charity, £9.52 would reach the charity. Ultimately, it's just maths and English.
Let's put all of this into context. Take just one event - The Great Manchester Run. Over a dozen or so years, this has generated &apound;30m for charity. That's a big number. But removing unnecessary charges would have added £2.1m. Every penny of Gift Aid could have reached the charities.
Even the best could be better
There are alternatives. Fundraising platforms which are not-for-profit feel like a better fit for the charity sector. But these too have operating costs which are ultimately being borne by the charities. Card-processing fees are the principal culprit - ironically, even for a fundraising platform operated and branded by a credit card company.
There are also set-up or monthly rental charges which charities pay for presence on fundraising websites. These charges are transaction-independent and therefore penalise smaller charities (since they are fixed costs, fewer transactions makes them more significant). It's refreshing to see that one provider has addressed this by banding its charges based on the value of donations it handles, but once again, they are charges which could be avoided completely.
A 'Wonderful' alternative
We are the new kid on the block and our take is different. All our costs are covered by corporate sponsors - and we'll continue to scour the UK for new businesses to support this approach. "All our costs" includes customer service, web development and hosting, marketing and public relations, legal services AND card processing charges (and we are NOT operated by a credit card company). Furthermore, none of us gets paid. This has two big advantages. Firstly, it's completely transparent for charities, fundraisers and sponsors. There's no spin, because there is nothing to spin. More importantly, our charities get EVERYTHING, including Gift Aid.
Getting our message out there and convincing charities to give us a whirl will be a task and we understand that jumping ship is a nervy business. Better the devil you know and all that. But it's not an 'all or nothing'. Try us for an event or two. Give us your feedback. Let us know what's missing; what you'd like us to do differently. We are on your side. 100%. That's what makes us wonderful.