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Daily Mail criticises JustGiving for spending £20m to raise £440m

Daily Mail criticises JustGiving for spending £20m to raise £440m

The Daily Mail this week devoted a full page of its print edition to criticising the business model of online giving site .

Under the headline “Website that rakes off £20 million a year from your charity donations”, journalists Paul Bentley and Tom Kelly presented an ‘exclusive’ critique of the pioneering website that has raised $4.2 billion for good causes from people in 165 countries.

There were no allegations of mismanagement, fraud, monopolistic practice, misuse of personal data, bad customer relations, or illegal or immoral practice. It was a ‘news’ report describing the business model of a commercial business that has been operating in that manner for the past 16 years.

Daily Mail article on JustGiving (6 February 2017)

Charging or raking off for its professional services?

Cost or value?

The article included a table of comparisons with JustGiving’s charges and those of competitor services. Under ‘How sites compare’ it compared the charging structure of each platform.

It didn’t feature:

  • the total sums raised by each platform
  • the number of charities using them
  • the number of individuals donating or fundraising via them 

Having featured the cost but not the value of each platform, the article applied another measure to JustGiving, previously used by The Daily Mail and others to query the effectiveness of charities, namely the annual salary of the Chief Executive.

It suggested that £152,000 a year (plus £46,600 of pension contributions) for managing a 120-staff major technology company that has transformed fundraising, generated several billion for charities, saved charities and individuals a great deal of time (do you remember collecting sponsorship on paper forms?), achieves an admirable Gift Aid reclaim rate, and inspired a slew of competitor platforms (some offering a subsidised and therefore, presumably more attractive, zero cost alternative) and other digital fundraising initiatives over 16 years was a waste of “your charity donations”.

Calculating costs

The article argues that JustGiving “officially” says it takes 5 per cent from donations, implying that there is an ‘unofficial’ rate. It states “but the percentage is calculated after including a Gift Aid tax rebate, so the cut works out as more”. 

This ‘unofficial’ and higher rate is explained thus:

“If you donate £10 to a friend’s 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 per cent free from the £12.50 – which works out as 63p, or 6.3% of the original £10 donation.”

The 6.3% ‘unofficial’ rate is not a real-world rate. A donation is either made with a Gift Aid declaration or without. JustGiving charges 5% on a standard donation and 5% on a larger donation (including Gift Aid).

Stephen Sutton appeal “made them thousands”

The article highlights the fact that JustGiving makes money from encouraging and enabling giving by focusing on one particular fundraising campaign.

Accompanied by a photo of him with his characteristic thumbs up sign,  the article reminds readers that Stephen Sutton raised £2.8 million through JustGiving following his diagnosis with terminal bowel cancer. He raised the money for Teenage Cancer Trust, with an original target of £10,000.

“JustGiving is believed to have taken about £100,000 in fees from the donations” report the journalists.

Of course, JustGiving charges fees for small and large campaigns. The large campaigns which attract publicity sometimes generate calls for JustGiving to waive its fees, despite the fact that without those fees it would not have been able to handle the large volume of donations rapidly and securely in the first place.

The article acknowledges that the site does occasionally choose to waive its fees, for example in the case of London Marathon runner Claire Squires who collapsed and died in 2012. In the case of Stephen Sutton’s campaign it did not waive fees but did make a donation of £50,000 to the campaign.

“Stop just taking”

The Daily Mail features its report into JustGiving in its editorial under the headline “Stop just taking”. It is a reference to the article which quotes a fundraiser’s tweet last month claiming “JustGiving should be called JustTaking!

It argues that “many will assume JustGiving is a charity itself”, an odd assumption for such a high profile and longstanding company used by millions of people. Most of the other online giving platforms are not run by charities.

It repeats the allegation that JustGiving takes “more than 6 per cent from most donations”. While it notes that JustGiving “claims the fees are ‘small'”, it concludes by suggesting:

“Any Mail readers planning their next charity fun run or bike ride may want to test that claim for themselves”.

 

Responses to the Mail’s story on JustGiving

  • ITV journalist Robert Peston described the Mail’s table of comparison costs “disturbing”.

He was challenged:

 

 

 

 

Indeed, the volume of responses in support of JustGiving and charities’ needs to spend money to raise money was noticeable, certainly compared to other responses to newspaper criticisms of charities or fundraising over the past year or two.

  • JustGiving said that hundreds of charities had defended it, quoting several who had done so publicly:

 

 

 

  • Karl Wilding, Director of Public Policy and Volunteering at NCVO, shared 10 observations on the Mail’s story:

 

“More charities, fundraisers and, more recently, crowdfunders choose JustGiving than any other platform because they raise more, net of fees, than cheaper or free alternatives.

“Charities pay between 5 and 2% on gross donations, which is excellent value for money compared to standard (and much higher) fundraising costs involved in other methods.”

 

  • Matt Collins, who runs agency Platypus Digital, published a response on the Institute of Fundraising’s website:  JustGiving: There’s a need to invest in innovation to support good causes.In this he focused on the need to invest in a good service or product. He suggests you (or charities) have a choice when faced with a problem (like how to maximise income from fundraising events using digital tools):

    “1. Find the money to pay for talented people to fix a problem, and get way, way more back in return

    2. Maintain a sense of entitlement, refuse to pay for anything, and watch as the problem gets much, much worse”

 

Significance of the Daily Mail’s criticism of JustGiving

The criticism provoked several articles which sought to query or explain the Daily Mail’s approach in context.

  • David Ainsworth wrote The Daily Mail has got it wrong on JustGiving in Civil Society. In this he argues that the problem is less with The Daily Mail and more with its readers, and that charities and charity sector organisations face a challenge of explaining what they do, how and why, more effectively.”The public don’t really understand how charities work, and resent the unavoidable fact that you can’t do anything in the sector without incurring support costs…

    “It’s charities job to speak clearly about themselves and their sector. If misunderstandings exist, that’s because you haven’t been clear enough.”

  • In Opinion: We are all JustGiving, Ian MacQuillin of the Rogare thinktank at the University of Plymouth described the Daily Mail’s article as “yet another ideological attack by the UK media on the [charity] sector.”This one was different, however, because of the “bottom-up groundswell of support for JustGiving” that was quickly evident, “with fundraisers spontaneously… tweeting and blogging their support”, a response which he described as “totally fantastic”.

    MacQuillin argued that the article “was part of a concerted, ideological attack on charities – particularly the way they raise money – that has been going on its current form for the best part of two years (at least)”.

    He suggested that the sector responds by developing “its own ideological counter-narrative that it can advocate confidently and coherently, rather than simply trying to rebut the ideological narratives perpetrated by the likes of this week’s Mail attack on JustGiving”.

    That assumes that sufficient organisations and leaders in the sector recognise it as an ideological attack, and not just ‘business as usual’ for some journalists.

 

  • James Gadsby Peet takes a similar view in Why we’ve got to change the conversation about the Daily Mail and JustGiving (and everything else!).He plainly states:

    “I think the Daily Mail want to dismantle the UK’s professional charity sector.”

    He recognises we seem to live in different times when fact-based arguments don’t convince many people who cling to a very different worldview.

    “We can’t use logic and reason to argue against an illogical attack. We have to understand the emotional place where it comes from and possibly play by some rules we’re not that comfortable with.”

    “The latest article about JustGiving is just another attempt to draw fire onto a service on which the modern industry is no doubt dependent. I wonder what else is on that campaign map — Legacies, GiftAid, Payroll giving?”

Reliability

In an unrelated move, two days after the article on JustGiving was published, Wikipedia changed its advice to editors on using the Daily Mail as a reliable reference source.

 

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Howard Lake is a digital fundraising entrepreneur. Publisher of UK Fundraising, the world's first web resource for professional fundraisers, since 1994. Trainer and consultant in digital fundraising. Founder of Fundraising Camp.

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