JustGiving, like many other major fundraising websites, adds a tip primarily as a direct revenue stream for its platform. This charge is typically presented to donors as an automatic, voluntary contribution on top of their intended charitable donation.
These platforms essentially "cash in on kindness" by leveraging the act of giving to generate income for themselves. Rather than solely relying on service fees charged to charities or fundraisers, they implement this "tip" mechanism directly on donor contributions.
How the Tip System Works
The practice involves automatically adding a percentage of the donation as a suggested tip for the platform. Donors usually have the option to adjust or remove this tip before completing their transaction, but it is pre-selected by default. This makes it easy for donors to overlook or simply accept the additional charge.
Historically, JustGiving has levied a significant percentage on donations as this automatic voluntary tip. For instance, some time ago, JustGiving applied a 15% tip on donations. Other platforms have similar practices, such as GoFundMe adding 12.5% and Crowdfunder 15%. This added percentage goes directly to the platform, not to the charity the donor intends to support.
The Purpose Behind the Tip
The main reasons fundraising platforms like JustGiving incorporate these tips include:
- Operational Costs: To cover the costs associated with running and maintaining the platform, including technology infrastructure, payment processing fees, customer support, and development.
- Revenue Generation: To generate profit for the company. These platforms are businesses, and the tips contribute directly to their bottom line.
- Alternative to Direct Fees: For some platforms, this model can be an alternative or supplementary income stream to charging charities or fundraisers a direct fee for using the service.
By adding a tip directly to the donor's transaction, JustGiving secures a portion of the funds without directly reducing the amount received by the charity from the initial donation, although it does increase the total cost for the donor.
