MPs demand ban on fundraisers' ‘misleading' tips
Fundraising websites have been accused of steering donors into giving 'voluntary tips' of as much as 19pc – fees which are not shared with charities.
One of those fundraisers, JustGiving, made £24m profit in 2023, up from an approximately £3.8m-a-year profit before it introduced the tip model, according to its company accounts.
The platform said it has raised more than £7bn for charities and good causes since it was founded in 2000.
Labour MP Jo Platt, member of the culture, media and sport committee, said: 'Fundraising platforms play an important role in facilitating giving. But concealed tipping options and hidden charges are unnecessarily diverting money away from charities and misleading donors.'
She joins several other MPs including Anneliese Dodds, Alex Sobel and Saqib Bhatti who have lodged Parliamentary Questions this year asking when the Government will address the issue.
When donors use JustGiving, the online platform suggests a tip set to 19pc.
The sliding scale, which allows the tip to be adjusted, cannot be set to zero. Instead, donors have to choose to input a custom amount, and set that to £0, to avoid making a 'voluntary tip'.
It is possible to claim back the tip. The JustGiving website states that donors can contact its customer service team via email or an online form in order to ask for a refund.
A survey of over 2,0000 people published this week by Strand Partners shows over three quarters of voters want the Government to address the issue. Two thirds said they wanted it to be easier to remove tip options when donating online.
JustGiving deducts 1.9pc of donations, alongside a 30p payment processing fee. Charities using the platform can pay a monthly fee of either £15 or £39 plus VAT for an improved service, and the platform claims 5pc of Gift Aid refunds.
After an automatic 5 per cent platform fee taken from donations was scrapped in 2019, the company's profits increased from around £3.8m a year to £19m. The company behind the platform, Giving.com, posted profits of £24m in 2022 and 2023.
Other fundraising platforms make it easier not to add a tip to a donation. GoFundMe lets donors slide the scale to £0, rather than requiring a custom amount to be entered.
A GoFundMe spokesman said: 'GoFundMe is the only major platform which processes Gift Aid for free and allows donors to move the voluntary contribution slider to zero per cent with one click.
'We encourage all other platforms to follow our lead and ensure donors can give safely without any nasty surprises.'
A fundraising code of practice will be introduced from November 1 this year, overseen by the Fundraising Regulator, and will require platforms to be transparent about fees and 'tips', and to offer straightforward ways to remove the extra payments.
A spokesman for JustGiving 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.
'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.'
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