Analysis: the 'anti-CSR' closure of Virgin Money Giving

Rebecca Cooney explores how the loss of the major online fundraising platform will affect charities

From the outset, Virgin Money Giving was explicit that it aimed to undercut the competition. Backed by the Richard Branson-founded bank Virgin Money, the online fundraising platform was always envisioned as a not-for-profit business, covering its costs through a 2 per cent transaction fee rather than the 5 per cent taken by the oldest and biggest player in the market, JustGiving.

VMG launched in 2009 to coincide with Virgin Money’s sponsorship of the London Marathon.

But in late July this year the platform announced it would close in November, almost immediately after its sponsorship ended, saying: “Given the significant investment required in the service for it to remain competitive, and without the brand exposure provided by the London Marathon, Virgin Money has decided to wind down the platform.”

The platform estimates that it has helped 20,000 charities raise more than £900m, and it has undeniably played an active role in shaping the market. It is not unreasonable to assume that JustGiving’s decision to scrap its fees and instead ask donors for a voluntary tip was driven by VMG, which loudly trumpeted its lower fees at every opportunity.

And when JustGiving came under fire for its fee structure in The Sun in 2020, VMG tweeted its support, saying: “Whilst you can’t run a fundraising website for free, you can do it without making a profit.”

Its subsequent closure has left a bad taste in the mouth for many professional fundraisers.

Simon Scriver, co-founder of the fundraising events firm Fundraising Everywhere, says the abrupt manner of the closure demonstrates that “it wasn’t here in the best interest of the charities, it was here in the best interests of itself”.

“That’s OK, you can look after yourself, but you can’t create your whole brand around the idea of putting charities and users first and then, when it doesn’t suit you, walk away at four months’ notice,” he says.

Identifying and switching to a new platform for fundraising campaigns and getting supporters to switch might be difficult, but not the biggest headache charities will face. VMG also allowed users to set up monthly donations to causes, and the challenge of migrating these donors to other platforms may prove insurmountable for some.

Scriver predicts that many donors will be lost in the transition, describing the lack of notice as “really selfish”.

“There’s so much they could have done to minimise the damage of this, especially when they announced a record income in marathon week this year and Richard Branson is flying into space” he says.

“They could easily have given charities 12 months to move or found a way that was more accommodating to donors, such as seeking someone else to take over the platform.

“This is actually a kind of anti-corporate social responsibility – proactively damaging charities for the sake of their business and their own personal gain.”

Richard Sved, a charity consultant, points out that VMG was a good product, offering one service that, as yet, other platforms don’t: allowing fundraising members of the public to split the money they raised between two or more causes.

He says that while JustGiving is a strong product and “more collegiate in its approach to its competitors… there is a major risk around costs and whether it’ll continue to evolve and improve, without the competition to drive it”.

Smaller alternatives such as Enthuse are also available, and companies such as Donr and the crowdfunding platform GoFundMe also offer charity services. Scriver recommends that charities use more than one platform.

“While you don’t want to be on every platform, because it’s time-consuming, VMG’s closure shows us that when you work with just one supplier you put yourself at risk.”

The drive to eradicate platform fees was probably misguided, he says, and the product of “a big private company swooping in to tell the sector what’s best for it”.

While many charities will take cost into consideration, Scriver adds, platform fees are low risk as they are only paid once donations are made, and appear to be the most sustainable business model.

He says: “It’s clear that the race to the bottom and zero per cent fees are unsustainable. Sooner or later you have to realise if you’re relying on that model, you’re relying on someone’s goodwill to survive and that isn’t really how the world works.”

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