Online donation platforms for charities, revisited

Back when we redesigned our website in 2016, we explored options for having a way for the public to donate to us online. There’s been a few changes since then, so we’ve updated our previous research, and expanded it to include a few more options!

First, a little background: we’re a locally-focused charity, and while we don’t rely on donations to fulfill our vision, we DO use targeted fundraising campaigns from time to time. When researching, we originally focused on the three most popular options – JustGiving, Virgin Money Giving and BT’s MyDonate – but now we’ll also take a look at a newer offering from Facebook.

Our initial decision on which platform to use was influenced by cost – something every charity has to take into account! This is ultimately why we decided to go with BT’s MyDonate for our site at the time.

Giving and the public eye

In the original version of this blog, we talked about the public image and uptake of the different platforms. But, just as we said then, it wasn’t really an influence on our decision. Indeed, the vast majority of people who donate would be people who know and care about you and your work in the first place. For a cause-based charity there may be some value to be found from being in the directory of charities that are available on a platform’s site, but it’s likely to pale in comparison to any work you do yourselves to drive people to donate. (Even then, a directory on a more popular platform means potential donors but also more competition.)

While it’s not something we addressed previously, one issue that does come from a platform’s image is the matter of trust. Would someone trying to make a donation be less inclined to continue if you use a smaller platform instead of one with a recognisable name? For example, most people would trust that a platform backed by a large company like Virgin or BT would keep their payment details safe, but can the same be said of a smaller donation platform they’ve never heard of? Unfortunately, there’s not much hard data either way, but it’s still an important aspect to consider.

But at what cost?

Back in 2016, we were instantly turned off from JustGiving due to their £15 monthly fee. As we weren’t expecting a large amount of donations, we could never justify spending that much. Thankfully, they have introduced a new basic tier that’s free, which should offer enough for a small charity to start collecting donations.

Another one we avoided was Virgin Money Giving. Rather unique among donation platforms, Virgin charges a one-time fee to get you started. When we first looked, this was £100, but it’s now risen to £150. If you’re using the platform to supplement other income streams it could take a while just to recoup the fee; hardly ideal.

However, the main cost of donations comes from transaction fees. These are usually a percentage of each donation taken, and cover the platform’s commission and payment processing fees. Several platforms don’t take any commission, including our original choice BT MyDonate, while some will take a rather large 5% off of every donation you get. I’ve included a few lesser-known platforms in the table below to give a better idea of your options.

Fee can be paid by donor instead

JustGiving Virgin Money Giving BT MyDonate Facebook Charitable Giving CharityChoice Givey
Commission 5% 2% (ex. Gift Aid) 0% 0% 0% 0%
Processing fees 1.25% 1.45%
1.6% Paypal/AMEX
1.3% credit card
£0.15 debit card
0% 1.45% credit card
£0.25 debit card
5%
Notes £150 one-time fee (ex. VAT)

To make this a bit easier to understand, here’s what you’d get if someone donated £10 to you on each platform, which includes an extra £2.50 from Gift Aid (see later for more info on that).

JustGiving Virgin Money Giving BT MyDonate Facebook Charitable Giving CharityChoice Givey
Donation £12.50 £12.50 £12.50 £12.50 £12.50 £12.50
Commission £0.63 £0.20 £0.00 £0.00 £0.00 £0.00
Fees £0.16 £0.18 £0.15 £0.00 £0.25 £0.63
Received £11.72 £12.12 £12.35 £12.50 £12.25 £11.88

Overall, there’s not much difference between most of the platforms – though JustGiving is still an outlier with its high commission on top of standard payment fees, despite being the most well-known. On the other end of the scale, CharityChoice is the only one we saw that gives donors the option of paying the processing fees instead of you – meaning you could potentially get 100% of a donation if the donor is willing to cover the fees.

Facebook – the 800lb gorilla

Late last year, social media giant Facebook began rolling out its ‘Charitable Giving’ tools across Europe – which allow charities to take donations directly through their Facebook page. The significance of this comes when you see that Facebook is by far the most popular social network, with an estimated 44 million users in the UK alone.

It’s not unusual for smaller charities to rely on a Facebook page as their main point of contact – nor is it unlikely that larger charities will use one as one of their ways of communicating online. Just by adding a donate button to your Facebook page, you’re greatly expanding your audience of potential donors – plus, when it comes to the idea of public perception that we discussed before, Facebook is definitely a household name.

There are a few other things to note: Facebook charges no fees on donations at all, which is a solid plus; however, they also don’t process Gift Aid claims on your behalf (see below for more info on Gift Aid). While they allow donors to state that Gift Aid can be claimed on the donation, you’ll need to deal with submitting claims to HMRC yourself, which does mean more time (and money) spent. And there’s one likely deal-breaker for smaller charities: the payout terms – unlike other platforms, Facebook will only pay out donations once they total £100 or more. So if you’re only expecting a small volume of donations, it might be a long time before you actually see the money in the bank.

What’s on the plate

Fundraising – help them help you

One of the most interesting features offered by most donation platforms is fundraiser events. This lets people raise money for your charity, whether it’s a sponsored run, or to honour someone special. These events will get their own page that serves to both highlight the cause and collect donations. And any money raised will go straight to their charity of choice. For fundraisers, it can really take away the administrative hassle and let them concentrate on the important part – raising money!

Gift Aid – money for nothing

Gift Aid is a great scheme and well worth signing up for. Simply put, it allows charities to receive an extra 25% absolutely free on top of eligible donations. However, having to track donations and submit Gift Aid claims manually can end up quite time-consuming, and even potentially expensive. So it’s not surprising that most major platforms offer the ability to claim back Gift Aid for you. Just register your charity with HMRC and the platform of your choice will handle all the paperwork for you. Every penny counts for charities, and that extra 25% will really make a difference.

And finally…

The best advice I can give is to explore the various platforms out there, because there’s never a one-size-fits-all solution. Facebook’s new tools seem a really great option, but the caveats around Gift Aid and paying out are likely to drive away smaller charities. For now, we’re sticking with BT MyDonate, due to having the best returns – if you want to check out our MyDonate page, it’s right here (still no donation required!)