Crowdfunding Breakdown 2018
Earlier this year (2018), Facebook introduced it's fundraising tools for charitable organisations and personal crowdfunding. Since it's introduction, it has been a hugely successful feature. To aid victims of Hurricane Harvey, Facebook's community managed to raise over $10 million. This feature is rivalling other organisations that do the same thing, such as JustGiving or GoFundMe, and just like these services, Facebook have announced that they are eliminating all payment transaction fees and in addition are now launching a $50 million annual FB donation fund which will match all donations made through FB.
Facebook's main competitors have a range of donation fees. The priciest of which, GoFundMe and CAREMAKER both charge in excess of 8% in fees, which all together cover costs for their services and payment processes. JustGiving, one of the most popular platforms, has a 5% donation fee on top of a 1.25% credit card fee ora 1.45% fee for PayPal. As well as this, they charge charities a monthly fee of £15 to use their service, so whilst it is questionable that Facebook has fees at all, there are others charging more. This said, there are some competitors who do their best to take as little a cut from donations as possible. The Big Give is free for charities to use, with a 4% fee on donations to cover the cost of their services and payment process; and Generosity has a 3% + $0.30 fee to cover payment process.
Before Facebook introduced it's own crowdfunding feature, users would share the JustGiving or GoFundMe site on their Facebook page, however, now there is no need to use these existing services. This new integrated feature is creating big challenges for them. A user wants a hassle-free experience, and Facebook has removed the need to leave the platform to a third party site. With Facebook's already established payment features, this integrated crowdfunding option removes the inconvenience of having to visit a separate page and fill in payment details.
Considering their profit announcements, should Facebook be charging fees for good causes? Or perhaps this is so they are not too competitive for the other services that are available? Users like to know exactly where their money is going when they donate and it's easy to forget that it is not free to run these pages. With charities under such public scrutiny on what percentage of their charitable income they spend on front line services rather than operational costs, should users be as concerned with what percentage of their donations go to the fundraising platform? There are plenty of platforms with a variety of fees for their services. Perhaps we as donors should be more selective with which platform we choose to donate through?