How much do online donations cost?

We're all facing huge fundraising challenges and a recent question on the SCIP list asked about options for taking donations online. Several people made suggestions that highlighted the need to compare the charges made by different services, so Mark Walker rounded up the comments and reviewed the fees of six of them.

JustGiving is the service that most of us have heard of and is largely credited with inventing the format. Just as ebay and Amazon changed the way we buy and sell goods online, JustGiving has built the trust of charities and donors so that giving money online has now become commonplace. In fact that change has been so successful that a lot of donors now pay online BEFORE the event even takes place. But, having had the market to itself for some time, JustGiving now has competition.

Most of its competitors use similar systems, not least so that donors will feel comfortable handing over their cash. There may be extra features, such as mobile giving, and you'll have preferences about how user-friendly the pages are or how easily it integrates with your website or other social media presence, but the most obvious differences are in the charges they make.

There are three lots of charges to consider and you may need to dig into the terms and conditions before deciding which route to go:

• set up charges - fees for creating an account
• monthly charges - to keep the account active and open for donations
• transaction fees - including 'commission' and charges from the card companies handling the payment

The following services were mentioned on the SCIP list and the fee information is taken from the current websites of the providers. There are other providers - such as CAF - but these illustrate the point and reflect the comments shared on the list.

JustGiving

• Set-up charges = £0
• Monthly charge = £15.month
• Fees = 5% to JustGiving + 1.3% credit card fees
• http://www.justgiving.com/charities/pricing-and-joining/#fee

Virgin Money Giving

• Set-up charges = £100
• Monthly fee = £0
• Fees = 2% transaction fee + 1.45% credit card fee
• http://uk.virginmoneygiving.com/giving/about-us/fees.jsp

BT MyDonate

• Set up fee = £0
• Monthly fee = £0
• Fees = donor pays 1.3% on a credit card and 15p on a debit card
• http://www.btplc.com/mydonate/AboutMyDonate/Termsandconditions/Charitiesterms.aspx

Charities Trust

• Set up fee = £0
• Monthly fee = £0
• Fees = 4% administration
• http://www.charitiestrust.org/content/fundraisers/faqs/does_this_service_cost_/index.html

Charity Choice

• Set up fee = £0
• Monthly fee = £0
• Fees = 0% "Charity Choice and The Co-operative Bank also currently pay the card issuer fees so these are not deducted from your donation."
• https://www.charitychoice.co.uk/CharityRegistration.asp

CharityGiving

• Set up fee = £0
• Monthly fee = £0
• Fees = 4% if Gift Aid is collected, £0 if it isn't
• http://www.charitygiving.co.uk/charges.asp

Note that all only accept accounts with registered UK charities and all will claim Gift Aid as part of the online donation process.

So how to choose?

The difference in charges is a bit like paying for a mobile phone - it depends what you want to do with it and how much you'll use it. Whilst Charity Choice continues to pick up the fees it seems like the best starting point, but there are a few questions to ask which may point to another provider, as cheapest isn't always best:

• how well does it work for the person making the donation?
• how easy is it to integrate into your website or Facebook page? Can you do it yourself or do you need a web designer to hande it for you?
• how well does it use social media to help your supporters multiply the money raised?
• will people trust it when asked to part with their cash?
• does it have the latest tools such as mobile-friendly sites and text-giving?

It may seem irrelevant for charities to think about mobile donations but Comic Relief took £15m through SMS giving this year - a whopping 20% of what it received. In such a fast-moving and competitive field you need to start your fundraising planning by thinking about the preferences of your target donors and choose a service to suit.

There will also be a big difference between the needs of a major international charity with a thriving social media presence and a small local charity that has an out of date website built by someone they can no longer contact. Some of the services that charge fees may well offer a better online presence than the free ones who simply give you the means to take money but none of the tools needed to attract donors.

It's not just about the cost!

The cost of the service isn't the only thing you need to think about. Whether you're just getting started or a fundraising veteran take a look at what others are doing, check out the figures above, think about the cost over the coming year and then give it a try. The the real hard work will start...

In my opinion the really tough challenge is less about saving a few quid on a service which you can later change and much more about spending time working on your fundraising plan and actually putting it into action!

Please let me know your thoughts on these services or any alternatives using the comments below.

Mark Walker, September 2011

A big thank you to Donna, Ria, Amy, Vannessa and David who added their ideas to the discussion on the SCIP list. The SCIP list is an email discussion forum that's been running since 1998 and has over 1,000 members. Click here to join

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