How Does Just Giving Make Money

Who you use to fundraise and donate money with can affect how much money the charity gets – so it pays to use an alternative to Just Giving.

When you donate on one of the big fundraising websites, you'd think all your money is going to the cause you're supporting. Well, it doesn't. I was pretty shocked when I discovered this a few years ago.

There can be fees added to or taken from the money you give, and the charities themselves could be faced with charges just for being listed on the platform.

Among the worst is the most popular – Just Giving. This is the only one of the major platforms that isn't non-profit. Alongside these costs to the charities, it until recently also added a compulsory transaction fee for customers too. It's now made that an optional charge, but paying it still means less of your money goes to the charity.

But some are much more affordable platforms. And as with most things, a little shopping around can maximise how much of your cash actually goes to the good cause.

As you'll see further down the article I've broken down how much money gets taken by the platforms. The cheapest gives 44p more to causes than Just Giving per £20 donated.

Though it might not seem a huge amount based on a £20 donation, it scales up massively over all the money that is raised.

For example, Captain Tom Moore had raised an unbelievable £32.8 million for NHS causes before it was closed on the 30th April. This was via Just Giving, and the fees and voluntary "tips" could easily be over £2 million.

If he'd chosen Virgin Money Giving then the total would have been half that (figures calculated via Virgin Money Giving's calculator). And potentially even less with a different platform.

It just shows that the platform you choose for fundraising or donating can make a huge difference.

(FYI Just Giving has said 97% of the money raised by Captain Tom will go to the NHS after processing fees, though I assume that doesn't include any extras people volunteer to pay to cover the fees. Plus it's made its own £100,000 donation on top)

Where your money goes when you donate

You'll be relieved that most of your donation does go to the charity – but not all.

Payment fees

For a start, there are card transaction fees that all the charities have to pay. They don't have a choice about this as it's a cost levied by the card processing companies. In fact, any time we use our debit or credit cards these are part of what we pay, whether charity or not.

Just Giving will also take a cut of any Gift Aid added to your donation too, as part of the processing fee.

However, different platform all charge different fees, which can make a difference.

Wonderful, one of the best free platforms, has had to close (hopefully temporarily) but shared that it paid just 0.8% plus 18p for each transaction. So anything higher than this is possibly hiding additional charges.

Tip jar warning: The cost we had to meet for payment processing was 0.8% and 18p per transaction. We handled £5m in donations. If your platform processes more than £5m and you're being asked to contribute more than 0.8% and 18p, do ask what they class as card-processing fees.

— wonderful.org (@wonderful_org) March 20, 2020

Platform fees

Of course, these donation websites have all got to cover the costs of staff and operations. And, yes, this money does have to come from somewhere.

And it's not cheap to do this. BT used to offer My Donate, a free service to charities, and fund it from its profits. But this project was closed down in 2019.

So some of the websites will add this as an extra charge on your donation, possibly voluntary, or just take it from the money you give.

Charity listing fees

And that's not the only way these companies take cash away from charities – the biggest platforms Just Giving and Virgin Money Giving both charge charities to use their platforms.

Just Giving charges a monthly fee of £39 + VAT for any charity that raises £15,000 or more in a year. For those which raise less the fee drops to £15 + VAT a month.

Virgin Money Giving meanwhile has a flat, one-off fee of £150 + VAT.

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The alternatives to Just Giving and Virgin Money Giving

If like me, you want as much of your money to go to charity as possible, and for the charity to be able to use the platform without a charge, it makes sense to avoid the profit-making Just Giving.

It's less clear-cut with Virgin Money Giving as though it is non-profit, the fees still make it quite expensive for smaller charities.

Fortunately, there are alternatives. Some don't charge for anything, while a few others might have a transaction fee, but are free for the charity.

The major downside with most of these smaller platforms is just that – they are smaller. They won't necessarily have your charity of choice on board, though it's worth looking to see what your options are. Often it's the smaller and local charities which need our support more than some of the giants – and they might be on the smaller platform.

If you're fundraising, then talk to the charity, or check out its website at least, to see if they have a preferred platform.

Ways to maximise your donation

As well as choosing the cheapest platform for charities, you can boost the amount they get from your donation by making sure they can claim the tax back from the government.

If you donate via your paycheck – often called Payroll Giving – the taxman actually contributes some of the money. So a Basic rate taxpayer would only contribute 80p for the charity to get £1.

This is automatic and in theory an easy way for the charity to get the extra tax cash on top of your donation. Ask your HR team if they run a scheme. If they don't seem if they will set one up.

So Payroll Giving works great for regular donations, but it won't work for a one-off contribution. In that case, and if you are a tax-payer, you can choose to add Gift Aid to your donations, adding 25%.

You'll see this option when you donate online. However with Gift Aid the charity has to claim this tax back. This can come with administration costs to the charity.

Both methods will mean the same amount of money goes to the charity.

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How much does it cost to donate £20

Here's the real cost of a £20 donation to Just Giving, Virgin Money Giving and some of the other donation platforms. Some of the platforms will give you the choice to pay this. I've included the extra value of Gift Aid on top too.

These figures assume you aren't choosing to add the fees to your initial donation. They also don't reflect Just Giving's monthly fee or Virgin's set-up fee which are worth bearing in mind.

Kindlink

Kindlink has no charges for the charities to use the platform or be listed, making it one of the cheaper options.

Payment processing fee of 1.45% + 10p = 39p
Platform fee of 0% = 0p
Gift Aid fee of 0%= 0p

Total cost per £20 = 39p

Total to charity after Gift Aid = £24.61

GoFundMe

With GoFundMe you'll be charged a similar amount to Virgin Money Giving but there's no charge for charities to be listed.

Payment processing fee of 2.9% + 0.25p = 39p
Platform fee of 0% = 0p
Gift Aid fee of 0%= 0p

Total cost per £20 = 83p

Total to charity after Gift Aid = £24.17

Just Giving

The monthly fee that charities are charged won't make much difference to this figure if they're taking a lot of donations. However medium-sized charities could fee the impact more.

Payment processing fee of 1.9% + 20p = 58p
Platform fee of 0% = 0p
Gift Aid fee of 5% = 25p

Total cost per £20 = 83p

Total to charity after Gift Aid = £24.17

Virgin Money Giving

Since Virgin Money Giving has a sign-up fee the actual amount will be a little less. Though for large charities the £150 one-off fee will be negligible.

Payment processing fee of 2.5% = 50p
Platform fee of 2% = 40p
Gift Aid fee of 0% = 0p

Total cost per £20 = 90p

Total to charity after Gift Aid = £24.10

During the lockdown the platform fee will be covered by Virgin Money but it'll return afterwards. The figures above include the platform fee.

Every Click

Another free site for charities to join, Every Click is funded from the commission paid by retailers if shoppers use the portal before making online purchases (in the same way cashback and voucher code sites work).

Payment processing fee of 4.8% = 96p
Platform fee of 0% = 0p
Gift Aid fee of 0%= 0p

Total cost per £20 = 83p

Total to charity after Gift Aid = £24.04

Givey

Givey is targeted at small and medium charities. It charges the donor 5%, so £1 for a £20 donation. But again the platform is free for charities to use. Further funding comes from businesses who can choose to match donations.

Combined payment processing fee & platform fee of 5% = £1
Gift Aid fee of 0%= 0p

Total cost per £20 = £1

Total to charity after Gift Aid = £24