Tagged: Charity

by Adrian :: 23.07.12

Micropayments: please indulge me in a little experiment costing you 50p

Dear Friends

Please indulge me by reading this and donate 50p – I want you to be the first to experience a game changing service in the UK.

Up until now, taking micro payments online hasn’t been feasible from a cost point of view because of the high merchant fees charged by Visa, Mastercard and American Express to name but a few.

That’s now history with the advent of a very disruptive little UK startup called Go Cardless. It’s been funded by several stellar VCs like Accel Partners and YCombinator so rest assured of its credibility.

The amazing thing about GoCardless is it facilitates the collection of money through the direct debit system in the UK – therefore it does what it says on the tin – It is entirely cardless. You sign up to GoCardless much the same as creating an account with Paypal. When signing up you setup a direct debit authority which GoCardless will use to collect any money you authorise to be sent. You can use your GoCardless account at multiple merchants.

The cost to the merchant is a mere 1% of the transaction with a maximum of £2! The merchant can setup one-off payment requests or recurring payment requests and these requests can only be authorised by you in a secure environment.

Obviously this is a game changer for the UK market as it suddenly makes all sorts of business models feasible.

Let your mind go…. But before you do- Please help me out? Where I see some amazing value is in micro payments for charity. If I follow a link to donate £1 – the charity receives 99p! See what you could do with this?

Now, it’s no secret that we support The Suffolk Foundation – for those of you who don’t know the Charity – it funds grass roots organisations in Suffolk that are in desperate need of help – often too small to have their own charitable status. (read the Hidden Needs survey they commissioned a while ago).

So in the spirit of a fine cause please could each of you donate 50p by following this link setup by The Suffolk Foundation

Please comment on this post when you’ve followed the donation procedure – letting me know how easy it was to setup. If (for any reason) you decided against it, please let me know why.

Thank you for your time, your 50p and for indulging me! You can now call yourself an early adopter – one of the first few to use a truly disruptive technology.

Adrian

PS – if you are a conservative, doubting Thomas, let me assure it’s totally safe. Gocardless.com is governed by the direct debit guarantee and is registered with the FSA as a small payment provider – the payment partner is the Royal Bank of Scotland. Nothing can leave your bank account without your request and authorisation and is far safer than using your credit or debit card.

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