MPs have raised concerns in parliament about the amount of commission on gift aid taken by online fundraising platforms.
Labour and Conservative MPs voiced their concerns after research by the advisory firm Strand Partners' claimed that charities missed out on over £7.5m last year because of the commission that online fundraising platforms charge charities for claiming gift aid on their behalf.
In written parliamentary questions within the last month, Conservative MP Saqib Bhatti and Labour MPs Jo Platt and Anneliese Dodds asked ministers to look at potentially banning the practice of charging commission on gift aid.
But last week civil society minister Stephanie Peacock said: “Fundraising platforms are commercial organisations that provide an important service to charities and donors.
“Many charities ask online fundraising platforms to claim gift aid on donations made on their platform for the charity, and pay a fee for this service to be provided because it is cost-effective and efficient to do so.
“DCMS will continue working with the Fundraising Regulator, charities, and online giving platforms to support best practice across all forms of charitable fundraising.”
A poll conducted by the advisory firm showed that 66% of the 2,010 people it surveyed online stated that they supported closing the “loophole” that allows online fundraising platforms to earn a commission from gift aid claims on charities’ behalf.
The firm stated that the survey sample is a national representative by age, gender and socio-economic group.
GlobalGiving UK: ‘We do not make money on this fee’
A spokesperson from fundraising platform GlobalGiving UK told Civil Society: “As a registered charity and non-profit, we retain a small part of gift aid donations to cover the essential operational costs required to get the donation, including any gift aid, into the hands of our non-profit partners around the world.
“We do not make money on this fee: we invest it right back into helping our community of 6,500 non-profits who are themselves delivering transformative locally-led work across a range of causes in over 175 countries.”
JustGiving: ‘Claiming gift aid can be costly and time-consuming’
A spokesperson for JustGiving told Civil Society: “We’re proud to support charities through our optional gift aid administration service, which is fully compliant with HMRC requirements.
“Claiming gift aid can be complex, costly, and time-consuming, which is why three-quarters of charities choose to rely on us to handle the process, allowing them to focus on their vital work. Full details of our gift aid administration fee are available on our website.”
Fundraising Regulator: ‘A matter between the charity and the platform’
A Fundraising Regulator spokesperson told Civil Society: “The Code of Fundraising Practice is clear: all fundraisers must be transparent about where donations go, so donors can make informed choices. This includes fundraising platforms.
“Where additional fees or tips are optional, platforms must give equal prominence to the option to donate without them – for example, by including a clear ‘no tip’ or ‘zero fee’ button.
“Our guidance also requires transparency around platform fees, including clear and accessible information on how fees are set, or where they can be changed or waived under certain circumstances.
“Where donors consent to gift aid being claimed, charities may ask fundraising platforms to claim gift aid on their behalf.
“This is a service arrangement, and any associated fees are a matter between the charity and the platform.
“The updated Code, published in April and taking effect from 1 November, introduces revised rules for fundraising platforms.
“Over the next six months, we will be actively engaging with online fundraising platforms to ensure they fully understand and comply with these changes – so donors can continue to give with confidence.”
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