Fundraiser Fees From 1 September 2016

What is the fee that Givealittle will be introducing? How does it work?
From September 1st, Givealittle will charge a flat 5% fee, inclusive of GST, on the amount raised by fundraisers on the site. The fee applies only to funds raised from September 1st 2016 onwards. You can find out more about how funds raised on the same fundraising page before and after this date are treated here {link to detailed examples}.
 
What is a top-up donation? How does it work?
A top-up donation is a new feature on Givealittle that will also be launched on September 1st. The top-up donation gives the donor the option to make a supplementary donation to the fundraiser specifically for the purpose of offsetting the fundraiser’s incurred fees. The top-up donation does not itself incur fees and can not exceed a maximum of 10% of the main donation to a page. 
 
Why do you need to charge a fee?
This change ensures the long term sustainability of New Zealand’s leading non-profit crowdfunding platform. In the last three years, the amount that individuals, charities and communities have raised through the site has grown from $500,000 per year to $22 million a year.
 
We have a duty to keep that growth going so that more New Zealanders can continue to raise funds for the causes that they are passionate about. This comes at a cost – we need to cover the expense of the work we do everyday in keeping the site running, processing payments securely, and improving the customer experience. Many of these costs are 3rd party costs, while we also have awesome staff looking after our customers every day.
 
There is no intent to make profit from the introduction of fees, and fees will not meet all of Givealittle’s costs. The Spark Foundation will continue to meet a significant proportion of Givealittle’s costs for the foreseeable future.
 
What are Givealittle’s costs?
Givealittle’s main costs are as follows:
1. Credit-card and payment processing fees paid to our merchant bank and payments provider,
2.  3rd party web hosting costs,
3.  Our awesome customer service and web technology staff.
We also spend a little bit on compliance costs (legal advice and other expertise), and are trying our hand at some marketing.
 
How are the fundraiser fees calculated and paid?
Givealittle’s current process is to release funds raised to the fundraiser monthly, between the 20th and 25th of the month following the month that the funds were raised in. This won’t change.
The introduction of fees will mean that monthly payments will firstly have fees deducted from the amount raised, and secondly top-up donations added back in. For instance, a fundraiser who has had $1,000 donated in a given month and $30 top-up donations, will the following month incur $50 (incl. GST) in fees and receive $980.

Why are fees charged to the fundraiser and not the donor?
Most other crowdfunding sites levy some form of cost on the recipient of funds raised - i.e. the fundraiser. Some offer donors the opportunity to contribute towards that fundraiser levy. We surveyed a large cross-section of fundraisers, donors, charities and the general public in December 2015, and a fee for fundraisers was the most preferred option for cost sustainability across all respondents.
Once fees are introduced on Givealittle, donors will have the option to cover some or all of the fundraiser fee via an optional top-up donation if they choose.
 
How will this change affect people who already have a page on Givealittle?
This change will affect any funds raised on or after September 1 2016 - for fundraisers with campaigns active on the site on that date, all funds raised from that date onwards will be charged the fundraiser fees. Funds raised before the fee introduction date won’t incur fees.

Consider these examples:

You mention continuing to improve the Givealittle service - what are you talking about?
We will continue to improve Givealittle as New Zealand’s leading platform for online generosity, and we have a number of new features to bring to fundraisers and donors in the coming months.
 
As an example, we launched Givealittle Plan in June 2016 - Givealittle Plan allows donors to set-up ongoing, tax-deductible payroll donations to charities they want to support long term. Donors can also set-up regular giving for any cause with funding from a credit or debit card.
 
Later this year, we will be releasing some new functionality for fundraisers that allows them to reactivate their crowd from past campaigns for new causes that help the same beneficiary. More broadly, over the coming months and into the future, we have a number of developments that we are working on and will bring to market - all of which will provide new and interesting ways for fundraisers to start, spread and succeed with campaigns; and for donors to find and support causes that they are passionate about.
 
How can a fundraiser have their fees paid by donors?
Donors will have the option to cover some or all of the 5% fundraiser fee via an optional, supplementary top-up donation. This will be presented on the website as an option for the donor at the point of making their main donation to the fundraiser.
Top-up donations won’t incur fundraiser fees.
 
How can a fundraiser have their fees paid by a third-party?

Its entirely possible for a fundraiser to have their fees fully or partially paid for by a third party. An example would be a corporate sponsor covering the fees for funds raised by, or for, a charity that that corporate sponsor supports. This would be an agreement directly between the fundraiser and any business (or other) backer they may have. For fundraisers and charities who are interested in doing this, we may be able to offer some branding support for the 3rd party. To find out more, please e-mail marketing@givealittle.co.nz.
 
How will the fees be levied? Will fundraisers receive an invoice?
Fees will be deducted from total funds raised at the end of each month. Net funds raised after the 5% fee has been deducted, and top-up donations added in, will be paid out on the between 20th and 25th of the following month.  We will issue an invoice that will outline the total funds donated, the dollar amount of the 5% fee deduction and GST included thereof, total top-up donations, and net payment amount. This process is the same for cause and organisation pages with no closing date.
 
If  top-up donations from donors amount to more than the fundraisers fees, what happens to the overage?

All top-up donations do not incur a fee, and all top-up donations are given directly to the fundraiser. So, any additional funds raised from top-up donations over and above the fundraiser fee would be added to the net payment to the fundraiser after the fee was deducted. For example, a fundraiser raising $1,000 in main donations and $100 in top-up donations would incur $50 including GST in fees, and receive $1,050 in net funds raised.
 
What happens if donations need to be refunded - will Givealittle still be taking their fee?
Occasionally, Givealittle closes pages and refunds all donations – usually because circumstances for fundraisers have changed, meaning that the purpose of funds raised that was originally stated is no longer valid.
 
In this instance, Givealittle won’t take a fee on refunded donations, as the service to collect and release donations to the fundraiser will not have been supplied. Donors would receive a refund in full of their original donation, including any top-up donation also given.
 
Given that Spark Foundation is a registered charity, can I claim a refund on the fees from the IRD?
No - the fees are not a donation to the Spark Foundation, they are a service fee charged to the fundraiser for services rendered.
 
Note that, for the donor, top-up donations made to a donee organisation that are over $5 are tax deductible (just like the main donation to a donee organisation).
 
Does the Amount Raised that is displayed on my fundraiser page (My Givealittle) include fees or exclude them?
 
How the site displays the total amount raised by a fundraiser is treated differently in different areas of the site.
 
●   The Donations Tab on public facing pages will continue to show the value of donations exclusive of fees or top-up donations.
●   Everywhere that displays a Total-raised figure (e.g. the right-hand side of pages; widgets; Explore/Search; etc.) will continue to display the gross total of donations made, exclusive of fees or top-up donations.
●   Fundraisers and page owners will see the fees incurred, top-up donations given, and a net amount raised in their My Givealittle pages, which can be accessed by logging in.
●   Fundraisers will be able to use the ‘Updates’ tab on their page, and any other communication channels such as their Facebook page, to let donors know how the top-up donations are going.
 
This approach means that the main donation a donor makes is reflected in the running total of all donations made; while fundraisers can access a detailed view of how their fundraising is tracking.
 
More Info click here
 
 

 

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