CAF have an online fundraising service for charities as well - see <a href="http://www.cafonline.org/default.aspx?page=6887">http://www.cafonline.org/default.aspx?page=6887</a>

They've got a very complex charge structure which lets "entry-level" charities put a toe in the water by adding a free profile and paying 4.5% of any donations they actually get as an administration charge. 

LMC hello, that’s an interesting response, and strangely very close to many an internal discussion we’ve had about this. Our web analyst did undertake an analysis of potential price points and how much a charity would have to pay us if we took a changeable percentage based on the amount the charity raised over time, and how much we would lose in subscription fees, just like your suggestion.

The main problem with that was the complexity of managing the processes in our back office systems and communicating it effectively to charities in our reporting area – the way our payment system works is that we pay charities every week and our 5% fee (on the donation plus Gift Aid) is only taken when we have reclaimed Gift Aid and paid that back to the charity (unless a donation wasn’t Gift Aided, in which case the percentage comes out of the donation).

So it could be the case that we would have to try and retrospectively change our percentage charge on donations made in the past and paid to charities. That’s a tough financial process to build and manage.

Having said that, your final point about the risk we incur by basing the service solely on percentages is a very perceptive one – giving up that guaranteed (to a certain extent) income would be a fundamental shift in our business model and adds a lot more risk, especially the way the economic climate is looking at the moment – the reasonable assessment of the risk a few months ago would be very different to one done today…

So yes, they are both interesting angles on our fees and ones we have  had internally (honestly, I’m not just saying this) and continue to have. It’s good to have external views on that too.

Hi Simon.

Thanks for sharing your opinion.

I understand the reservations about paying £15 per month – your thoughts are something we have heard from some other small charities too.

I should clarify, though, that charities are not tied in to paying £15 pm for any length of time – a charity could join Justgiving for just one month if they wanted to.

We used to charge £20 pm for this month-to-month style contract and only £15 pm if a charity joined for at least a year, but we changed that just over a year ago – see http://justgiving.typepad.com/charities/2007/07/reduction-in-ju.html for more info.

The suggestion you make is a good one, one we’ve discussed internally many times and also passed by potential charity clients too. We do want to make our site more attractive to the smallest charities, as we believe that we can offer them a lot more value in terms of reach, technology and expertise than we might a large national charity, who will always receive lots of donations.

But for your information, we’re in the process of building a new version of our site, and a change in pricing models is something that we are considering. Sorry to sound vague, but these are ongoing discussions, so we ourselves don’t know yet!

Only just finished replying to Simon and I see LMC’s comment too – I’d better write some more in a minute.

The trouble with Simon's idea is

a) that the smaller charities are likely to have a high proportion of donors who donate to smaller charities because they think that big charities spend too much on "non-essentials" (like enabling their staff to eat and pay their mortrages through their salaries) . These smaller charities may not have the same capacity for donor care (explaining the Facts of Life - no, not *those* facts, but the ones about how all charities have necessary overheads like audit fees and insurance before you start on fluffy stuff like staff to make sure the job's done properly etc etc etc). Trying to explain to a donor why it costs them more to give to Small CaringSharing than it does to Enormous Charity on the basis of the respective organisations' incomes would go down like a mug of cold sick.

b) the size of the charity does not necessarily correlate with the income they receive through JustGiving. All charities have differing donor profiles and it is highly likely that JG have figures that show that some tiny charity which appeals to 18-50 year old donors and is smart about online marketing earns far more through the site than a larger charity which appeals more to the over-65 donor market (less likely to give online) or is mostly reliant on major donors rather than the general public. Very extreme examples I know, but bet they're realistic. Ish.

So, I would suggest that JG considers doing away with the flat fee altogether and bases percentages purely on the amount raised for the charity through the site. For example, up to £x p.a - 7%; £x,01-£y - 6%; £y,01-global GDP - 5%. Amend percentages quarterly in arrears - existing charities to be charged for their first quarter on the basis of their previous year/part-year annualised income from JG; every charity that registers 'after the change' starts out at the 7% charge then if their annualised income from JG for the first quarter takes them into the next band, the next quarter's charges would be based on that. And so on. Or something - JG would know how best to calculate it so that they don't end up running at a loss. I would suggest that single figure percentages (i.e. 9 max) would be the most that the market would stand, however many bands they decide to go for. This would hopefully have the nice side-effect of encouraging many charities to 'push' JG as a giving mechanism in the hope that they'll reach the next band and reduce their fees. My reason b) would still stand to a certain extent - but I think donors would see it differently.

Of course, JG working purely on percentages is more risky than the reliable 15 quid a month from each charity. But haven't they been around long enough now to be able to make a reasonable assessment of that risk based on past performance and current indicators?

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... nearly Vlad the Impaler

That's a big issue for small charities. I am a volunteer for a small local charity which is associated with a larger national one (see http://www.intelligentgiving.com/the_buzz/discussions/misc/4491#comment-426 for details). Recently I took part in a sponsored walk where I would have liked to raise money for the local charity using JustGiving. But it wouldn't be worth their while to pay £15 a month when there may only be a few occasions each year when anyone would want to use this. So I ended up raising money for the national charity instead - good, but not so good from my point of view.

Here's a suggestion for JustGiving - why not offer two different pricing models? Big charities could continue with the existing model (£15 monthly plus 5%); smaller ones could choose to pay no monthly subscription but a higher percentage on each gift.

Adam,

Thanks for the interesting post. Speaking on behalf of Justgiving, we're certainly not perfect, but we're constantly trying to improve. I agree with a lot of what you say, except for being "able to charge charities pretty much whatever it likes, and offer whatever services it wants."

We charge fees that we think are fair, based on the value we add and the service we provide - if what we charged was not a fair reflection of the value we add, I don't think charities would use our service (as you yoursleves now do).

As for offering whatever service we want - that's not entirely correct either, since we do react to online technological trends and what charities and users ask us for when we innovate and develop new products and services.

Aside from that, we're happy to welcome competition in the market. We always strive to offer the best possible service to charities, fundraisers, supporters and donors - our goal is to enable ordinary people to raise as much possible, as quickly, easily and efficiently as possible, for the causes they care about.

That's our sole goal as a company - it's what gets all 40 odd of us out of bed every day. And that's the passion that drives us to offer the best online fundraising services for charities that we can.

Jonathan Waddingham

Charity Champion

Justgiving