Rachel Reeves is under pressure to make sure cash reaches charities and is not pocketed by online fundraising platforms. The Chancellor is facing calls for people to be able to donate cash without having to give a tip to internet giving services.
There is also concern that charities are hit with fees for processing Gift Aid donations. Polling by Strand Partners shows overwhelming support for action to ensure cash is not diverted away from charities among people who back Nigel Farage’s Reform UK.
Three out of four Reform supporters said online giving sites should show greater transparency. Four in five want the Government to make Gift Aid fairer so that more money reaches good causes.
Nearly seven out of 10 want sites stopped from charging a commission on Gift Aid donations. They also want it to be easier to remove tips when you make a donation.
Gift Aid allows charities to claim an extra 25p for every £1 donated. There is concern that online giving services can claim the full sum but deduct commission fees before passing the money onto the charity.
Donors are often invited to leave a tip, and there is alarm that some services do not allow the “slider” to be dragged to zero. It is feared this results in millions of people funnelling cash to companies.
Under a new Fundraising Regulator code of practice which will come into force in November, a platform is required to set out how a fee will be calculated and how much it will receive from the donation.
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Labour MP Alex Sobel has pushed for the Government to “take steps to require that tipping sliders on online fundraising platforms can be dragged to zero”. But in June the Government said it has “no current plans to bring forward legislation on fundraising platforms”.
Former Shadow Chancellor Anneliese Dodds earlier this year quizzed the Chancellor on what is being done to “ensure the full amount of Gift Aid claimed by online fundraising platforms reaches charities”. She was told it will “ultimately be a commercial decision on the part of a charity to work with a fundraising platform”.
The JustGiving platform charges a 5% fee for its optional Gift Aid reclaim and processing service.
A spokesperson for JustGiving said: “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.”
A spokesperson for GlobalGiving UK said: “As a registered charity and nonprofit, 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 nonprofit partners around the world. We do not make money on this fee: we invest it right back into helping our community of 6,500 nonprofits who are themselves delivering transformative locally-led work across a range of causes in over 175 countries.”