Website that Rakes off £20mn a year from your Charity Donations*

Website that Rakes off £20mn a year from your Charity Donations*
By Paul Bentley, Tom Kelly

The JustGiving website is used by millions every year to raise money for deserving charities.

Many, however, are unaware that it takes more than £20million a year from fundraisers – while its boss has a £200,000 pay package.

The firm takes a cut of more than 6% from almost every donation. Some of the money is spent keeping the site working 24 hours a day and finding innovative ways of raising more for good causes

Founders: JustGiving’s Anne-Marie Huby, seated, and Zarine Kharas

But accounts show more than £10million last year went on staff costs – with the website’s directors, technicians, sales and administration workers paid an average salary of more than £60,000. The boss of the firm earned a pay package of £198,000.

Last night charity chiefs accused JustGiving of ‘greed’, saying the fees were ‘hard to stomach’. And fundraisers told of their fury, labelling the site ‘JustTaking’.

JustGiving is used by millions to manage donations from friends and family when they are raising money for charity, such as through sponsored cycle rides or races.

Amateur fundraisers set up a profile on the site which includes a description of why they are raising money and which charity the funds will go to. People can then donate through the site and write messages of support on the profile page.

But many are unaware that so much of their money is taken in fees by the firm.

One appeal currently on JustGiving was set up by the parents of a desperately ill four-year-old boy named Sam.

They have so far managed to raise £160,000 to fund cancer treatment for him abroad that he cannot get on the NHS.

But under JustGiving’s terms, the firm stands to make about £10,000 from Sam’s treatment fund.

 

JustGiving officially says it takes 5% from donations. But the percentage is calculated after including a Gift Aid tax rebate, so the cut works out as more. Pictured: JustGiving bosses

JustGiving officially says it takes 5 per cent from donations. But the percentage is calculated after including a Gift Aid tax rebate, so the cut works out as more.

If you donate £10 to a friend’s marathon fundraising page on JustGiving and it is eligible for Gift Aid, the taxman tops up the donation to £12.50.

JustGiving then takes its 5% fee from the £12.50 – which works out as 63p, or 6.3% of the original £10 donation. There is then an extra card processing fee of between 13p and 17p.

 

On top of this, JustGiving charges subscription fees to charities if they want to use the site to raise money. Small charities raising up to £15,000 in a year including Gift Aid have to pay £15 per month, plus VAT. Larger charities pay £39 per month, plus VAT.

The fees appear far higher than those charged by competitors, such as BT’s MyDonate website and Virgin Money Giving.

JustGiving has continued to take the high fees despite an outcry in 2014 when it emerged it was to take a cut from nearly £3million raised on its site by teenager Stephen Sutton, who died from bowel cancer.

Instead of waiving the commission fee, JustGiving donated £50,000 to Stephen’s campaign. It is believed to have taken about £100,000 from the donations.

The cut could have been higher but JustGiving takes less commission from donations to charities receiving a large volume of donations.

Some £440million was raised for charities through JustGiving in 2016, up from £404million in 2015.

JustGiving donation pages do not declare the exact cut the firm will take, but include small-print at the bottom of each profile, stating: ‘Charities pay a small fee for our service’ and adding a link alongside the words: ‘Find out how much it is and what we do for it.’

The firm insists it is more transparent than its competitors about the fees it takes.

JustGiving was launched in 2001 by former lawyer Zarine Kharas and Anne-Marie Huby, a charity director.

Accounts show the highest paid director of JustGiving was paid a salary of £152,000 in 2015 and pension contributions for this boss were £46,600 that year. The firm would not say which of the founders took this £198,600 pay package.

JustGiving’s co-founder Miss Kharas, a former City lawyer and investment banker, has always been open that it is a ‘for profit’ company but said her motivation in founding the firm was to serve a ‘genuine social purpose’.

Cambridge-educated Miss Kharas said in a 2009 interview:

‘I didn’t set it up to make money. That’s an important distinction.’

In 2015 JustGiving paid its 157 employees £9.45million in wages and salaries – almost half of the £21.6million it took that year in turnover from donor fees and charity subscriptions.

When share payments, pension contributions and social security costs are included, the total spending on staff was £10.98million.

Ashley Fulwood, chief executive of OCD-UK, said his small charity’s fees for JustGiving had increased last year by more than £300.

‘I understand they have to cover their overheads,’ he added.

‘But half of the money is going on wages.

Stephen Sutton's mother Jane Sutton (centre left) with Kate Collins (centre right) Director of Fundraising for the Teenage Cancer Trust with Anne-Marie Huby MD of JustGiving (left) and Zarine Kharas Co-Founder at the JustGiving Awards 2014

Stephen Sutton’s mother Jane Sutton (centre left) with Kate Collins (centre right) Director of Fundraising for the Teenage Cancer Trust with Anne-Marie Huby MD of JustGiving (left) and Zarine Kharas Co-Founder at the JustGiving Awards 2014

 

‘They are taking people’s hard-earned money for themselves. It is greed. The increase in our fees this year is the equivalent of someone doing a 10k race for us. It is difficult to stomach.’

In January a fundraiser wrote on Twitter that others should consider using alternative charity websites, adding:

 ‘JustGiving should be called JustTaking!’ Joe Timmins, who has used the site, added: ‘JustGiving making excessive profits from charity.’

JustGiving claimed the fees it charges are reinvested in the firm so it can run the site efficiently and safely for charities.

It said the money is used to create new fundraising tools, provide customer service and help charities analyse their successes.

The firm claims its competitors do not notify donors on fundraising pages that they charge a fee. Instead, donors have to navigate away from their fundraising page in order to learn about their fees.

A spokesman for JustGiving said: ‘More charities and fundraisers choose JustGiving than any other fundraising site because we help them raise more, net of fees.

‘Our small fee is systematically reinvested into creating the services and technologies that help good causes raise more money, and our investors have never taken a penny out of the business.

‘As a company, we have helped raise far more money for good causes than lower-cost or free options, which offer a poor service through lack of investment and let charities and users down as a result.’

Cancer sufferer’s appeal made them thousands 

Stephen Sutton raised £2.8million through JustGiving after he was diagnosed with terminal bowel cancer.

The inspirational teenager aimed to raise £10,000 for the Teenage Cancer Trust before he died – but the amount spiralled after his campaign became a worldwide internet sensation.

In total more than £5million has been donated because of Stephen, who died aged 19 and was awarded a posthumous MBE by the Queen

The inspirational teenager aimed to raise £10,000 for the Teenage Cancer Trust before he died

The inspirational teenager aimed to raise £10,000 for the Teenage Cancer Trust before he died

Almost £3million has come through online donations on JustGiving. But JustGiving is believed to have taken about £100,000 in fees from the donations. The cut was lower than it might have been because JustGiving takes less commission from popular charities, such as the Teenage Cancer Trust. It can be as low as 2 per cent.

JustGiving refused to waive the fee despite an outcry about it in 2014. Instead, the firm donated £50,000 to Stephen’s campaign.

After Claire Squires collapsed and died while running the London Marathon in 2012, her JustGiving fund for the Samaritans rose from £500 to £400,000.

Well-wishers found her page online and gave generously in memory of the 30-year-old hairdresser.

But they were furious when it emerged JustGiving was due to make as much as £26,000 from her page in only 48 hours. JustGiving later announced it would waive the fee.

More than £2.8million was raised on JustGiving during the ‘Ice Bucket Challenge’ fundraising campaign in 2014.

That summer, millions of people poured freezing water over their heads to raise money for Motor Neurone Disease charities.

JustGiving’s fees mean it could have made up to £175,000 from the donations.

The final figure will have depended on whether gift aid was claimed and whether JustGiving offered any fee discounts for the charities.

JustGiving denied taking a £175,000 fee in this case but would not disclose the exact figure.

 

Sources*

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