The charity donation websites that take a cut of your kindness

Charity donation website MyDonate, run by BT, is pulling the plug on its service this month because it is struggling to survive in a cut-throat market.

Abandoning the service on June 30 means that 12,000 charities which depend on it will now have to find other donation platforms to help them raise cash.

Charities increasingly rely on such websites as they make it easy for people to give money to a good cause. 

What many people do not realise is that charity website providers, including JustGiving and Virgin Money Giving, make money by siphoning off donated money into their own pockets

What many people do not realise is that charity website providers, including JustGiving and Virgin Money Giving, make money by siphoning off donated money into their own pockets

The websites allow fundraisers to advertise events they are participating in – for example a sponsored run – along with a link so that donations can be made instantly online.

But what many people do not realise is that the majority of website providers, including JustGiving and Virgin Money Giving, make money by siphoning off some of the hard-earned donated money into their own pockets.

JustGiving was forced to drop a 5 per cent fee on donations in March after being criticised for profiting from fundraising following disasters, such as the concert terrorist attack in Manchester and Grenfell tower fire, both two years ago.

But it still takes a 'processing fee' of 1.9 per cent of any donation made plus an additional 20p. It can also take 5 per cent of any Gift Aid claimed from the taxman.

On top, it cheekily suggests: 'Adding a small contribution on top of your donation means we can continue to help more people.' 

You can ignore this – it goes to JustGiving. The donation website also collects at least £18 a month from individual charities for allowing their fundraisers to use its service. It is hoping to entice charities that previously used MyDonate by offering the first three months for free with a special deal ending next month.

Virgin Money Giving has a 2 per cent 'transaction fee' and 1.45 per cent 'processing fee'. In addition, any charity that agrees to accept money through the Virgin website pays a one-off £180.

Another major player Everyclick levies a single 4.8 per cent 'fees on donation' charge while Golden Giving demands 2.8 per cent of the amount given. KindLink takes a 1.45 per cent cut plus 10p on any donation.

The most generous is the not-for-profit Wonderful.org. Thanks to financial support from The Co-operative Bank and other sponsors, every single penny you give goes to the charity.

A brand like Just Giving can attract a greater number of donations as people feel more comfortable paying into it thanks to its big name. The down side is the reduced donation total

Mark Watson, chief executive of charity website developer Fat Beehive

Mark Watson, chief executive of charity website developer Fat Beehive, says: 'If you look at how much money goes to the charity then it is no contest – Wonderful.org beats the competition hands down.

'But the closure of MyDonate shows how vulnerable some of the less well-known charity

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