Virgin Money Giving
It was with sadness that I received the news that Virgin Money Giving (VMG) will close after 12 years. The vision of providing a not-for-profit alternative to other fundraising websites is something that as a founder of TheGivingMachine, I align with and they have helped so many good causes generate vital income including our own charity. But it is clearly hard to make these kinds of platforms work and news stories do not always help the general public with information above opinion.
So what’s difficult about a donation platform? Well, the first thing is that everyone expects it to be completely free and in VMG’s case they had the support of the Virgin Money company and brand. In every transaction paid by a credit or debit card there is a charge usually 1-2% + say 15-20p to the payment processing companies who make that happen. That means for example if you collected £100m in donations with the average value of donation being £50, somewhere around £2m - £2.5m would be charged just to process those donations let alone pay for any of the systems and people to help make that happen.
In our charity we offer a very simple but effective donation solution for all our good causes. We chose not to add the functionality that VMG has (gift aid collection, campaigns/events etc.) as there seemed little point duplicating what a great organisation like Virgin could do. We’ll have to rethink that going forward as the marketplace needs not-for-profit leadership in this space.
Being an entrepreneur myself, I know that profit is one of the best drivers of innovation but I’d like to see more success for not-for-profit organisations in the giving space. Costs have to be covered and income has to be generated to reinvest to make sure tomorrow’s services are better than today’s and that needs to be done transparently and in partnership with supporters and good causes alike.
As thousands of charities now look for alternatives for their fundraising platforms, I hope there will be a thriving marketplace of charities, social enterprises and community organisations as well as regular for-profit businesses that step up to help. With my entrepreneur hat on , I see this as a great opportunity for our charity TheGivingMachine but with my 3rd sector hat on, I also see it as a great opportunity to help each other build a better world together.