The true cost of charity revealed as just giving reaches £1bn milestone

09 Jun The true cost of charity revealed as just giving reaches £1bn milestone

The website Just Giving, which lets users donate to charity online has announced that online donations made through it’s site have reached £1billion, but does all this philanthropy come at a cost?

There was a time when anyone doing a marathon to raise money for charity had to first undergo an equally gruelling event: the sponsorship run. It usually involved a trawl around the neighbours’ houses, clipboard and A4 sheet of paper in one hand and an empty tin in the other.

The internet changed all that. And one internet site in particular led the way. JustGiving has transformed the way people donate to charity. No more knocking doors in the rain trying to keep your sponsor sheet dry. Today, fundraisers receive donations at the click of a mouse.

About 21million have used the website, which began in 2000, to raise money for charities, which in turn, are registered there in their thousands.

Last month, JustGiving announced it had helped raise £1billion in the last ten years. But it has come at a price.

JustGiving is a private for-profit company and it charges charities £15 a month to use its service, as well as a five per cent fee on each donation.

There are cheaper deals out there for charities – Virgin Money Giving has a two per cent fee, for instance, although charities must pay a one-off £100.
But JustGiving is too ubiquitous for them to ignore.

It insists its Gift Aid efficiency outweighs the fees, particularly for smaller charities without large administration teams.

‘Charities know that it costs money to raise money,’ said its managing director and co-founder Anne-Marie Huby.

‘By participating in JustGiving, they cut their fundraising costs because they empower their own supporters to do the campaigning and the canvassing.

‘Every time someone creates a fundraising page, they cover the costs effectively – their effort saves the charity the cost of having to raise that money because it costs a lot of money to raise money.’

JustGiving sends the donations to charities every week and says it re-invests in new ways of helping raise money for voluntary organisations.

Although there has been discontent in some quarters about the fees charged by JustGiving, it emphasised it had always been up front about them.

‘We’ve always been absolutely transparent about the way that we charge,’ said Ms Huby. ‘Ironically, it was charities in the early days of the business who said they had misgivings about making the fee public because sometimes it can be a little bit awkward, they felt.

‘We always took the view that it was much better to be entirely transparent about it and we continue to hold that view. In the end, we stand by the quality of our service. We provide a really valuable service on which thousands of charities rely for their fundraising and we continue to innovate.’

She added: ‘Reaching £1billion is a fantastic milestone. It was hard to convince people back in the day that the internet would have the effect it would have, so hitting £1billion was a great validation of that idea and a great tribute to all the amazing people who have used the site.

‘Without them, the site wouldn’t thrive and people do the most extraordinary things for charity, for causes they really care about.

‘There’s been a charity fundraising industry in this country for decades. For many, many years charities have been using mailing houses, the post office, they pay for electricity… all these services that power the fundraising industry, including entirely specialised companies that deal with direct mail, that create advertising companies for charities. In a sense, JustGiving is no different.

‘The only difference is we are entirely transparent and we only succeed if the charity succeeds.’

Personal finance expert Annie Shaw, founder of CashQuestions.com, said: ‘They’ve made it very easy for people to give. I don’t have a problem with them charging.

‘Every charity has a charge somewhere. I don’t think it’s unreasonable to make a charge, it’s a matter of how much you charge and then it’s up to whoever’s fundraising which service they choose.’

Some Key Facts:

• 8,200 charities use JustGiving for donations.
• 93% of fundraisers say the fundraising climate has got tougher in the last year and 94% expect it to get worse in the next 12 months.
• There are more than 162,000 registered charities in England and Wales.
• It is estimated that charities in Britain are losing up to £700m a year in unclaimed Gift Aid.
• JustGiving raised more than £200m for charities last year.
• It cost most charities in Britain between 15p and 25p to raise £1
• In the past ten years JustGiving fundraisers have swam 320,000 miles and ran nearly 76,000 marathons
• There are 16m users of JustGiving
• The site has more than 400,000 live fundraising page.

• The top charities in England and Wales based on annual income are:
• The British Council – £692m
• The Arts Council of England- £601m
• Nuffield Health – £554m
• The Gavi Fund Affilate – £520m
• Cancer Research – £482m
• The National Trust – £412m
• The Charities Aid Foundation – £399m
• Oxfam – £367m
• Save The Children Fund – £291m
• Anchor Trust – £283m

ROSS McGUINNESS speaking to co-founder and Managing Director of JustGiving – Anne-Marie Huby.