JustGiving under fire over ‘astonishing profit margin’ from donations

Fundraising platform JustGiving has come under fire over the level of profit it makes from donations.

The company made more than £31m before tax on £59m of income from fees from donors and charities in the 2023 financial year.

Andrew Sanford, a partner at accountants Blick Rothenberg, said it was an “astonishing profit margin for the nature of that business”.

“They have got a very repeatable piece of software, that is quite easy to use,” he said.

He said he was aiming to set up a fundraiser for himself and his office colleagues for a charity walk to donate to causes including The Royal Marsden hospital, and began investigating the best way to help people donate.

He said, for charities missing out on money that goes to the company “there must be a better way”.

JustGiving deducts 1.9 per cent from charitable donations plus 30 pence to process the payment. But it also asks for a tip, suggesting 17 per cent of the donation. And it charges charities subscription fees of up to £39 a month.

open image in gallery

A spokesperson from JustGiving said that since the fundraising platform began 25 years ago, “We’ve enabled millions of fundraisers to raise nearly £7bn for a huge number of charities and good causes.”

“In order for us to continue to support fundraisers, it is essential that we operate as a for-profit organisation. In recent years we have seen growth in the volume of donations which in turn has naturally increased our profitability,” the spokesperson said.

In 2019 it scrapped its previous model of a 5 per cent platform fee charged to charities and introduced the tip.

The spokesperson said: “Following consultation with some of the UK’s leading charities, in 2019 we moved to a voluntary contribution model, so that as much money as possible could go directly to charities and good causes. This is now standard practice across the industry and the voluntary contribution presented is in line with the market.”

“Today, anyone using our platform has the option to leave a tip on top of their donation to support the running of JustGiving and this is not compulsory.

“When people do choose to add a tip, this goes towards investing in and maintaining the technology that helps our site continue to securely raise funds on a global scale, 24/7.”

The introduction of the tip was also the point at which profits at the company shot up, rising from £4.4m in 2018 to £9.6m in 2019.

Mr Sanford said that after spending on the tip, “you suddenly think that money could really be spent elsewhere”.

JustGiving came in for criticism in 2014 when it reportedly stood to make £180,000 from fundraising efforts of teenage cancer sufferer Stephen Sutton, who had raised £3.7m. Donors asked it to waive its fee. The company insisted at the time that a £50,000 donation it made plus a “volume discount” meant it made less than a quarter of the claimed sum.

In 2020 it was urged to reveal how much it stood to receive from donations to Captain Sir Tom Moore’s sponsored walk for the NHS. He raised £15m at the time of the criticism, ultimately rising to £38m as more donations flooded in.

Nikki Kerr, director of fundraising and marketing at Family Support Work – which helps families in Sussex facing poverty and other crises – said competition for JustGiving has shrunk in recent years, with fundraising platforms from Virgin Money and BT having shut down.

She said that JustGiving has made donating much speedier and helped her raise more money.

“They are well known, so people trust them and people use them,” she said. “To do a good job, you need professional people who know what they’re doing, so they need to be paid for it.”

open image in gallery

But she said the change to a tip has meant she has had to explain to donors why the £10 they aimed to donate is now 10-20 per cent more on their bank statement.

“I don’t necessarily agree with the amount that they take,” she said. “And since they changed it and turned it into this tip format, it is much more confusing for the donor.”

She said there were settings available to make the tip zero, but “it’s very hard to find it”. Ultimately, this confusion “hasn’t necessarily done any favours to the charity sector”, she said.

JustGiving is not alone in being for-profit. California-based GoFundMe charges 2.9 per cent of donations plus 25 pence, with a discount rate for charities of 1.9 per cent plus 20 pence. It says much of this goes to suppliers. It also asks for tips.

GoFundMe Ireland Ltd, which covers 16 European countries including the UK, last filed accounts in the UK for 2021, which showed €42.6m (£35.8m) turnover and €8.6m pre-tax profit.

The filings are not up to date, but they suggest a comparable level of profitability to JustGiving, said Mr Sanford.

The two compete closely, with GoFundMe having a page on its website arguing its service is better and cheaper than JustGiving.

JustGiving operates through the company Giving.com Ltd. The company paid a £24.5m dividend to its owners in 2023, down from £31m the year before, according to its most recent accounts. It is owned by American firm Blackbaud Inc, which itself is owned largely by US pension funds and investors.

Its fees helped bring in £59m of revenue for the company in 2023, the last time it filed accounts. After paying its 129 staff £14.4m including pension costs, the company’s profit before tax was £31m.

The company gathered more than £550m for almost 20,000 UK charities.

GoFundMe said: “GoFundMe is the only platform which allows donors to move the voluntary contribution slider to zero per cent with one click. Underneath the slider, we explain how that contribution helps us help millions of people around the world raise billions every year for causes they care about. We encourage all other platforms to follow our lead and ensure donors can give safely without any nasty surprises.”