The online donations platform JustGiving will abolish its 5 per cent platform fee from today.
Third Sector can reveal that the site will no longer take a 5 per cent fee on donations made through it from the donation or Gift Aid. Instead, donors will have the option to voluntarily pay as much or as little money as they want to JustGiving on top of their donations.
But the platform will continue to charge card-processing fees of 1.9 per cent plus 20p and will also continue to charge 5 per cent of the Gift Aid due on donations as a fee for collecting it from the government, though charities will now be able to opt out of this service.
According to its own figures, JustGiving has 24 million users in the UK, raising money for 450,000 charities, and has raised a total of £3.8bn since it was launched in 2000.
Keith Williams, general manager of JustGiving, told Third Sector the company had made the change in order to move with the times.
"I genuinely think this is the biggest thing we’ve done in the 19 years since we were founded," he said.
Williams added that there were three reasons for the move. The first was to maximise the amount that went to the causes and the second to ensure transparency, which he said was particularly important in a growing atmosphere of distrust of large technology companies.
Third, he said, the company wanted to achieve sustainability by ensuring as many people as possible were donating. A recent report by JustGiving’s parent company, Blackbaud, said that although digital giving had increased by 5.5 per cent in 2018, overall giving had fallen by 4 per cent.
The company has faced increasing competition in recent years from other online platforms, such as GoFundMe, a US-based platform that arrived in the UK in 2016 and dropped its platform fee for charities last year, and Virgin Money Giving, which charges 2 per cent.
JustGiving has been heavily criticised by MPs and in the national media for making a profit from events such as terrorist attacks, and in October announced it would waive its fee for disasters and emergencies.
Williams said the company had taken the criticisms "very seriously" and in response had since November been consulting donors, fundraisers and charities over its fees and Gift Aid.
"It has not been a decision that we’ve made lightly," he said. "We’ve been working for eight months to ensure sure we make the right decision, and working with the right stakeholders, the right data, and the right tests to ensure that we are going to be here for the next 30 or 40 years, raising money for the sector"
Williams said he did not have any estimates of how many donors were likely to pay the company voluntarily or how much they were likely to pay.
"We need to provide the best service to the donor and the consumer to ensure they see the value in what we do," he said.
He added that the consultation showed the vast majority of charities were happy to pay for JustGiving to claim Gift Aid on their behalf, because claiming it in-house would have required additional staff.
But only 20 per cent of donors, he said, understood who was processing Gift Aid and acknowledged that the company needed to educate them on the issue.
Williams also revealed that JustGiving would soon allow people to use Google Pay to donate through the platform.
"So much is changing," he said. "I genuinely believe that, like 19 years ago, when there was a major revolution in fundraising, now is the tipping point of the next change."