Justgiving: profit in disguise 7 December 2014 at 4:44PM in Charities 17 replies 4.9K views

Keep_it_safe

We sat down this afternoon to make our annual donations to various charities, including £150 + Giftaid to the Simon Community. After we made the donation we noticed the money went to a company called Justgiving and at first thought we had been scammed.

We re-opened the Simon donation page and realised the only mention of Justgiving was the name on a strip across the page. Research reveals that Justgiving is a trading name of Giving Ltd. which makes over £1 million a year by raking off at least 6.5% of our donations.

I make no comment on whether Justgiving offers value to the charity or whether the Simon Community should use a less expensive provider. My wife and I do feel misled by the Simon Community webpage in that we thought we were helping the Simons and not some fatcats in London. This sorry tale has led us to question the whole charity industry.

dzug1

Well evidently the Simons have reckoned that paying 6.5% to Justgiving is better than trying to do the job themselves and making a botch of it.

Owain_Moneysaver

If you went through the Simon Community website it would have told you:

One-off Donations Online

There are two ways to donate on line:

(1) at our JustGiving site log on now
(2) through the Charities Aid Foundation secure site using your credit/debit card or CAF Charity Card donate now

I think it's very clear that they are using intermediaries to process your donation. It also gives the option of posting them a cheque etc.

In terms of value, the JustGiving fee is 5% which includes processing the Gift Aid claim administration. 1.3% is to WorldPay for a credit card fee (or 17p if you'd used a debit card). It's likely the charity finds this competitive with running their own payment processing website, merchant account, and HMRC claim processing.

Keep_it_safe

That's my point -- we did go through the Simon Community website and saw no reference to Justgiving until we reached the secure donation page, unlike the other charity sites where we have also donated. (In our innocence we thought we were helping a local charity.) For example, some Service charities use Bmycharity which does not take a rakeoff for handling donations. We've also found more about Justgiving, which we had not heard of, and found that its chief executive is paid £150k pa and that its profits have fallen from £3.5 million to £1 million 2011/2012. Hard times for everyone I suppose ...

Armorica

Justgiving is pretty famous. I believe that charities that use it find it cost effective and benefit from an increase in donations due to the ease of giving.

Nothing in life is free in the long term. You also seem to blur the line between income and profit.

Justgiving was founded in 2000 and didn't make profits until 2006. By March 2012 it had collected £1bn for charity (with costs/profits of a small %age of that number). Justgiving also makes it easy for charities to reclaim giftaid - this is one of the reasons why charities get more money this way.

Traditional charity donators are middle aged and above. Justgiving - with links to facebook and use of the net - has seen increases in donations from the younger population.

dzug1

Keep_it_safe wrote: »

. (In our innocence we thought we were helping a local charity.)...

What makes you think you weren't?

asajj

You never heard of JustGiving? Well they are pretty big and a good platform for many charities.

They offer many ways to donate and they take away a lot of admin job away from the charities (which is a cost saving). Gift aid is an expensive process and they also track it for charities as said above.

As for the salary of the CEO, well i'm afraid, for London, this is even a low salary. Plus there are many charities paying similar salaries to their executives.

charliewocka

Hi there, I lead a Charity Group at work, raising funds for employee nominated charities each year. With JustGiving, the Virgin equivalent, CAF etc. there is a processing fee. It might seem steep or unfair to have to pay, but having spoken to charities, it works out cost efficient to them because they have a company who is handling the processing of donations, calculating and claiming the tax relief etc. If a donation is eligible for gift aid, by the time you take off the processing fee, they are still receiving over 100% of your original donation.


Not sure if you are employed, but it could be worth asking your employer what their charitable process is? I am very lucky as my company match all employee donations and we gift aid as well, using CAF. We have the option to donate at source, so a £10 donation to charity costs an employee £8, or £6 if a 40% taxpayer, plus gift aid is added on top. I've encouraged a large amount of employees to route their standard monthly/annual donations through this way to get a huge benefit to charities.

Keep_it_safe

Our thanks to everyone for your explanations and views. As you gather we are past middle age, non-techie, and well out of touch with today's billionaire charity "industry" and its fundraising methods.

We have decided to use Bmycharity for future donations, avoiding the rakeoff by third parties. Otherwise we are sending old-fashioned cheques to charities based in our local area rather than national organisations many of which spend 25% of our donations on raising even more funds ... but then as I said, we're old-fashioned.

oldtoolie

All donation processors charge fees of some sort. Bmycharity has a low processing fee for the individual donation but a higher joining fee for the charity.

Running a charity effectively always entails costs. Good charities balance fundraising and administration costs with the sums they need to raise to achieve the results they are seeking.

Charities pay landlords, printers, web design companies, rubbish collectors, accountants and much more. The salary of the CEOs of these companies is irrelevant to the work of that charity.

What is important is that charities seek value for money in their purchasing.

vikki_louise

I wouldn't stop supporting a charity just because they use justgiving. Although some big charities do use justgiving it's often small ones who could never otherwise take donations by credit or debit card as you need a big income (and a member of staff or volunteer) to do that.
Did you know you can look charities up and see their income and how they spend it? This is the one you helped http://apps.charitycommission.gov.uk/Showcharity/RegisterOfCharities/CharityWithoutPartB.aspx?RegisteredCharityNumber=283938&SubsidiaryNumber=0