@adrianmelrose

by Adrian :: 23.07.12

BT disrupts online giving market. Who would know?

BT a disrupter? Who would have thought it? And it seems to be a well guarded secret too! In this post I analyse three competitive online giving sites and BT comes up trumps.

Just Giving was the first to market and invested heavily to educate us and create the, now, much accepted culture of online fundraising. I take my hat off to them as, with any early adopter, they have funded the markets’ education and arguably need to recoup that investment. Their pace of innovation in very recent years has increased too and their offering is robust and very usable. But, it comes at a price compared to the two other products now on the market. I am willing to bet that most of you haven’t heard of BT myDonate whereas a see quite a bit of fundraising through Virgin Money Giving. This post compares the three offerings from a cost point of view.

I’ve chosen not to analyse the features of the online providers since I think the core offering is what people are most interested in and the core of all three remain consistent: If I’m promoting a fundraising event I can easily host a fundraising page online allowing me to have my supporters sponsor me using a debit or credit card.

Charity signup
All three offerings require the charity to sign up with the service in the first instance. Sadly this seems unavoidable since, amongst other things, the online provider needs to deal with the Gift Aid registration of the underlying charity and to collect bank details ensuring that they are able to remit the funds raised to the charity safely and securely.

Because the bulk of the small charities are not VAT registered I am quoting the VAT inclusive figures in my analysis as I’d prefer to track net cash cost. At the time of writing the VAT rate is 20%. So, if you can claim VAT back then adjust my figures please. BT doesn’t charge the charity to register or a monthly fee for membership. Just Giving charges £18 per month and Virgin £120 up front. If you’re a larger charity, you may argue this isn’t a barrier or significant cost. If you’re a small charity, then I’d argue it is!

Charity signup charges

Once Off

Monthly

BT MyDonate

Virgin Giving

£120.00

Just Giving

£18.00

Merchant Fees Let’s first talk about the fees the payment processing costs us. BT is clear about what their payment provider charges: 1.3% for credit cards and 15p per transaction on a debit card (they don’t accept Paypal). Virgin charges 1.45% on all cards (even debit) and 1.6% for Amex and Paypal. Just Giving tell us Barclaycard charges 1.3% but doesn’t tell us what the charge for debit cards or Paypal.

Admin Fees
Some work is needed before you can compare apples with apples. Just Giving quotes a fee of 5% whereas Virgin Money charges 2%. But, Just Giving clearly discloses that it levies this charge on the donation plus the gift aid whereas Virgin only levies its 2% on the donation before Gift Aid. To make things easier I’ve assumed all the following scenario (please note that the

I run a 10k race for a small charity registered for Gift Aid. I use my online profile to raise £500 and all my supporters use a credit card rather than a debit card or paypal. This is what my charity receives:

Reconciliation of Gross Donation to net proceeds to the Charity.

Gross Donation

Gift Aid

Total Proceeds

Credit Card Chg

Admin Fee

Charity Receives

BT

£500

£125

£625

£6.50

£0.00

£618.50

Virgin

£500

£125

£625

£7.25

£10.00

£607.75

Just Giving

£500

£125

£625

£6.50

£31.25

£587.25

Of the £500 donated by my supporters- these are the % charges

Fees charges

Excl Merchant

Incl Merchant

BT MyDonate

0.00%

1.30%

Virgin Giving

2.00%

3.45%

Just Giving

6.25%

7.55%

When it comes to charity Every Little Bit Counts. I think the above numbers speak for themselves and the charities I advise will be moving over to BT myDonate. I’d be interested in your views.

BT mydonate launched in 2011 and was received quite a bit of press coverage

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  • http://www.spudballoo.com spudballoo

    I’ve used BTMyDonate a few times now and whilst the cost element makes it a winner, it’s not the most user friendly site for the charities in terms of reporting etc. The site is a bit buggy too but I had excellent helpdesk support by telephone and email. All in all it’s so worth ditching JustGiving etc but you don’t get an elegant user experience with MyDonate. 

    • http://adrianmelrose.com/ Adrian Melrose

      Good feedback, thanks! Yes, BT myDonate doesn’t feel that refined but as you say, definitely worth comprising a little for the significant cost benefit. Good to know that their telephone support and email support was excellent. 

  • Buddieinek

    I wouldn’t touch Justgiving and I am actually reluctant to donate via them online!
    My charity used Charitygiving… which has low fees and is itself a charity.
    That said, MyDonate has a massive organisation behind it and the capacity to become an ‘industry standard’, so I have applied for our charity to open an account with them.
    Beauty of Charitygiving is that if a donor is not a taxpayer, they process and pass on the full donation for free!

  • bob

    My Donate is probably best for small charities but the services of the other big two providers are needed for large charities processing thousands of donations, especially when it all happens at once at a big event. Just Giving are Just Expensive. Having used both extensively, it’s my experience that Virgin Money Giving give as good a service for less money.
    So it’s no surprise that the big charities choose VMG. They are stuck with having accounts with JG (and paying the monthly fee) as well because of the brand name being so well known. It’s really sad that so many fundraisers are unwilling to change to VMG or My Donate even though the charity they support would benefit.
    Charity Giving, of course, turned out to be a very unwise place as they went bust in very dubious circumstances losing charities lots of money. That really makes it hard to choose a small cuddly provider.