Rabu, 02 Mei 2012

JustGiving.com waived fee on Claire Squires donations but does it really need to take 5% each time you give?

JustGiving.com waived fee on Claire Squires donations but does it really need to take 5% each time you give?

By Andrew Oxlade

PUBLISHED: 12:12 EST, 2 May 2012 | UPDATED: 12:21 EST, 2 May 2012

When the huge public reaction to the death of marathon runner Claire Squires became apparent, the reaction from JustGiving, which hosted her fundraising, should have been automatic: it should waive the substantial fee that it creams off donations.

But it was only late last Tuesday morning that the ‘for-profit’ company said the charge would not be applied - after an email from us and the start of a backlash on their own homepage blog, which was urging people to donate.

This evening, Claire’s fundraising total had hit £910,000, or £1.1million including the gift aid top-up from taxpayers.

Miss Squires collapsed and died less than a mile from the finishing line of the 26.2-mile course on Birdcage Walk near Buckingham Palace on April 22

Miss Squires collapsed and died less than a mile from the finishing line of the 26.2-mile course on Birdcage Walk near Buckingham Palace on April 22

JustGiving says it charges 5 per cent but this is applied after gift aid so the £55,000 it would have made works out as more than 6 per cent of public donations.

Some of the people I’ve spoken to this week, on social media and in person, don’t realise there is a charge.

It’s hardly surprising. There’s no mention of it on the homepage and only a small reference way down at the foot of each giving page, which most donors are unlikely to see.


JustGiving pioneered this method of online giving a decade ago but now it’s the supine encumbent, surpassed by far cheaper rivals, such as Virginmoneygiving.com, Bmycharity.com and Charitygiving.co.uk.

Virgin Money, which is not-for-profit, only charges 2 per cent on donations and not on gift aid, and Bmycharity.com applies no commission, just a flat charge on card payments.

They also charge the charities a lower fee than JustGiving just to register to accept donations. [Read the story on Justgiving and its cheaper rivals].

It's big business for JustGiving. Consider that the London Marathon raises more than £50million a year. JustGiving will account for a large chunk of that each year - and take 5 per cent.

JustGiving claims its revenues help to hone the process of giving and help it make more money for charities. It claims to have raised £770million since 2000, which should mean earnings of £38.5million for the company. It insists £14million has been 're-invested in technology alone'.

Presumably after the staff are paid - there's 72 of them - there's potential for decent profits.

To be fair, innovation should be encouraged and rewarded when it contributes to the common good.

But for the sake of transparency the company should declare its cut of each donation during the actual payment process and publish its annual profits on the website. And just maybe it should take a little less.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

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Justgiving has revolutionised and simplified the way both people can give money and charities can raise it. Businesses such as this provide a service that requires massive infrastructure and development costs. The 5% fee is well below what traditional fundraisers charge and is in most cases claimed back from gift aid. Any profit the company makes is in my view well deserved.

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It provides a service that is convenient so I don't see why they shouldn't take a cut. Like Clive from Fife has said if you don't like using them use a different service. Overall, I think in the longrun it's probably generated more for charities because it is quick and easy than if it didn't exist at all.

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Service providers need to cover their costs - agreed. But there are alternatives to justgiving. Most notable is the NOT for profit Virginmoneygiving which takes just 2% of the donation (not the gift aid contribution).

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Justgiving's success is evidence that they provide a good service that the market wants - and charities are obviously willing to pay for it, otherwise they wouldn't use the service. No charity is forced to register as a potential beneficiary through the site. If the cost was excessive, the recipient charities would surely set up a rival service, perhaps through the Charities Aid Foundation or some other body. The people who set up Justgiving have created a platform that has done wonders for charitable giving, making it quick and easy to get sponsorship, without the hassle and embarassment of collecting grubby fivers off colleagues and friends. They deserve their cut, and if people don't like it they can put their money where their mouths are and try setting up a 'free' alternative, demonstrating just how easy it is to run a big operation, employ 72 people, and deal with GiftAid administration with no income.

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