Mobile operator O2 has announced that it will drop charges to charities on donations of £10 or less from its customers. This will result in an extra 10p in the pound being received by charities using dedicated 70 prefix short codes, the company claims.
Simon Davis of O2’s Sustainability team acknowledged that the move followed the ruling earlier this year that VAT is not payable on charity donations made via text message.
So charities will receive 90% of the value of the donation by text. Davis commented that O2 would still charge charities 10% of the donation, to cover its “network costs, VAT on the cost of the text message, insurance against bad debt and a range of third party costs”.
He argued this was fair on the grounds that it was “comparable with the fees charged by online charity giving platforms.”
Hannah Terrey, Head of Policy and Public Affairs at the Charities Aid Foundation, welcomed O2’s move but pointed out that “this still means £1 will be lost in charges on a £10 donation”.
She added: “Eventually we would like all mobile phone companies to charge no more than 10 pence whatever the size of donation because research shows that is the maximum amount acceptable to donors”.
CAF would, she said, “continue to work with Joe Saxton [of nfpSynergy] and the Institute of Fundraising to persuade the other mobile phone operators to follow O2’s lead.”
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