Charity fundraising websites...

...and charity fund-taking websites.

Fundraising websites ... taking their cut.

Usually on the Charles Fudgemuffin blog I like to feature daft subjects and as a general rule I prefer to avoid discussing serious subjects. However, this week I've decided to break with tradition and cover a serious subject which really annoys me, and that subject is the fees charged by charity fundraising websites...

There's been a lot of coverage in the media of the Alan Barnes fund which was set up by Katie Cutler after Alan was the victim of a cowardly attack outside his own home. The attack left Alan too scared to return to his home, so the £330,135 raised will be able to buy Alan a new house where he won't feel frightened.

Katie has now set up another fund to raise money for Kacie Martin who is a two year old girl with the severest form of Spinal Muscular Atrophy. Kacie's is a heart-breaking story, but if she can get a special wheelchair which costs £27,000 then this will help improve her quality of life.

They're both excellent causes and the funds have highlighted that there are a lot of very generous people in the world.

However, after doing a little research into websites like Go Fund Me (the website which hosts the fundraising pages of Alan and Kacie), I couldn't help but feel more than a little angry.

Here are some figures...

For every UK donation made through the Go Fund Me website, Go Fund Me take 7.4% of the total plus 20p per donation. When you do the sums, this means that from the Alan Barnes Fund, Go Fund Me creamed off £29,390.00 ^*1 of all the donations! Almost thirty thousand pounds!

To recap, Kacie's wheelchair costs £27,000, so if websites like Go Fund Me were more concerned with helping people, and less concerned with making a profit, these unjustified charges of almost thirty thousand pounds would be more than enough to pay for Kacie Martin's new wheelchair.

As I say, usually on the Charles Fudgemuffin blog I prefer to cover silly subjects and just have a bit of a daft laugh, but it makes me angry when websites make a profit out of worthy causes. Their profits come directly from money which should be helping people in need, and to make matters worse, on the Go Fund Me website they make the misleading scare-mongering claim:

"BEWARE of other sites claiming to be ‘100% Free’. They will simply charge your donors instead and you will collect less donations as a result."

To be blunt, this is a lie.

Not all fundraising websites are unscrupulous, and to name two excellent examples, givey.com don't charge charities or donations, and instead make their money from businesses, and mydonate.com is funded by 1% of BT's profits, so again there's no percentage charge and just a 13p/15p debit/credit card processing fee.

Just to make things absolutely clear, both of the causes championed by Katie Cutler are very worthy causes, so it's excellent that there are so many generous people in the world who have supported these causes. However, as I've already mentioned, if Go Fund Me hadn't trousered almost thirty thousand pounds from Alan Barnes' fund, Kacie Martin could already have her new wheelchair.

What motivates some fundraising websites?

In fact the Go Fund Me website states that since they were launched in 2010, they have collected over $710,000,000 in donations from eight million donors.  Go Fund Me's charges vary by country so when you do the sums, from the 710 million dollars collected, approximately 50 million dollars ^*2 has been taken in charges! I'll say that again...

Fifty.
Million.
Dollars.

Fifty milllion dollars which was donated towards good causes but which has instead been taken in charges.

Of course, not all of this is profit. Some of it goes on processing fees, and the cost of setting up and maintaining their website. But does it really cost fifty million dollars to run a website for four years?

According to givey.com and mydonate.com, it doesn't. Many other charity donating websites also manage to run on less than the 7.4% + 20p per donation that Go Fund Me charge, so either Go Fund Me are extremely inefficient or they're factoring in an overly generous operating margin for themselves.

Getting back to the 710 million dollars donated, if all those worthy causes had been set up on givey.com then the total deducted in charges would have been...

Zero. ^*3
Nil.
Zilch.
Diddly squat.

If all those worthy causes had been set up on mydonate.com then the figure would be approximately $1,700,000 ^*4, which is slightly higher than zero, but still a lot less than the approximately fifty million dollars taken by Go Fund Me.

Doing the sums...
Calculating the charges with givey.com.

On a closing note, it would be nice to think that the gravy train for websites like Go Fund Me won't last forever. I would personally love to see the public boycotting Go Fund Me and switching to alternative non-thieving websites which are motivated by helping people, rather than by profit.

Finally, if you or someone you know is thinking of setting up a fundraising page for a worthy cause, before you decide which charity fundraising website to use, do the maths and compare the fees charged by Go Fund Me with those charged (or not, as the case may be) by websites such as givey.com and mydonate.com. Then, once you examine the figures, think of all the worthy causes which could have been helped with that fifty million dollars.

You can find further details on the best charity giving websites to use in an excellent report on the Money Saving Expert website:
Best websites to use for setting up a charity fundraising page

. . . . . . . .

Calculations:

*1

£330,135 x 7.4% = £24,430.00
+ 24,801 x 0.20 = £4960.20 (24,801 donations at 20p per donation)
Total = £29,390.20


*2

7.9% + 0.30c per donation in the United States, so based on the hypothetical scenario where every donation was a US donation...
$710,000,000 x 7.9% = $56,090,000
+ 8,000,000 x 0.30 = $2,400,000
Total = $58,490,000

Fifty Australian dollars. In Australia, Go Fund Me's
charges are 'only' 6.75% + 0.30c per donation.

6.75% + 0.30c per donation in Australia, so based on the hypothetical scenario where every donation was an Australian donation...
$710,000,000 x 6.75% = $47,925,000
+ 8,000,000 x 0.30 x 0.77896 = $1,869,504  (Based on today's exchange rate).
Total = $49,794,504

N.B. The total donated is already shown in US dollars on the Go Fund Me website, so a currency conversion for the donations doesn't apply.  However, the 0.30c per donation is charged in Australian currency, so therefore a currency conversion applies for the 30 cent per donation.


*3

710,000,000 x 0% = zilch
+ 8,000,000 x 0.00 = zilch
Total = zilch


*4

710,000,000 x 0% = zilch
+ 8,000,000 x 0.14 x 1.52354 = $1,706,364.80  (Based on today's exchange rate)
Total = $1,706,364.80

N.B. mydonate.com have a 13p/15p charge debit/credit card processing fee, so figures are based on an average figure of 14p.

Footnote: Just for the record I should mention that I'm a generally tight person and don't often give money to charity or worthy causes, so admittedly I'm a bit of a hypocrite for criticising Go Fund Me and similar websites. Apologies for my rant and hopefully things will be back to being daft again next week. However, the point I wanted to make is that on the rare occasions when I do give money to charity, I like to know that the money will actually go towards helping the cause it's supposed to be supporting, rather than going to the website hosting the fundraising.