Why Givematcher Made Online Fundraising Free

Online donation platform Givematcher recently made its fundraising services free for small and medium charities. CEO Franck Demoiseau explains why online fundraising is now a basic need for any charity and why free services are a valuable tool for Not for Profits.

In his bestseller Free (2009) Chris Anderson, editor-in-chief of WIRED Magazine and curator of TED explains that in a digital marketplace where the marginal cost of a new unit is zero (like online fundraising), then a free service will appear. This has allowed many services to be free, such as Wikipedia, Google, LinkedIn, Skype, and Dropbox, to name a few.

It costs a fundraising portal nothing to host a new fundraiser and it costs only the credit card costs to process new donations, so when a fundraising portal is charging commission on new donations, this is pure profit.

In April 2015, Givematcher made its fundraising service free for small and medium charities. The only charge is the credit card fee.

Givematcher – wanting to help small and medium charities

In fact, the reason behind Givematcher’s decision to make fundraising free is more heartfelt and profound than simple compliance with zero marginal cost economics.

“When it comes to people’s hard-earned generous donations to important causes they deeply care about, fundraising portals have a moral duty to be as close to free as possible,” Givematcher CEO Franck Demoiseau said.

‘We know the causes supported by small and medium charities are extremely important, and we see the amazing hard work they put in every day because they care so much. We have made fundraising free for small and medium charities because they need it the most and because we genuinely want to help them!”

In The Long Tail (2006), Anderson shows that marketplaces are composed of a small number of leading products / markets that dominate (the Head), and a huge number that struggle much more (the Long Tail). This occurs in the charity space where larger charities with strong brands and important supporter bases have much greater capacity to attract considerable funds than the many tens of thousands of medium and small charities (the Long Tail).

Free services are vital for the survival of organisations in the Long Tail. This is especially important for small and medium charities with regards to their fundamental need to raise essential donations.

Online fundraising – a charity’s basic need

Online fundraising is a basic need for any charity. Hundreds of thousands of Australian fundraising supporters raise a huge amount of money for charity from their networks each year. Until now fundraising supporters have not been able to fundraise for some 99 per cent of small and medium charities because these charities have not subscribed to expensive fundraising portals that large events have associated themselves with (typically, locking themselves into exclusive arrangements).

Small and medium charities have not been able to afford the high costs charged by these large profit-making fundraising portals: e.g. they have not been able to afford $440 for an annual subscription, or justified paying 6.5 per cent commission + transaction fees + GST on every donation. Charities want to be transparent and have found it difficult to justify paying $850 in annual fees, commission and transaction fees to raise $5,000 (assuming they raise this).

This has been a real shame because online fundraising, apart from being a charity’s basic need, also happens to be a fundraising channel of the future: this thriving fundraising channel has experienced exponential growth for many years and the prediction is that exponential growth will continue for many reasons, including the following:

• Online fundraising now being free allows any charity access to hundreds of thousands of caring Australians who fundraise in events, campaigns, workplace fundraisers, and organise their own fundraisers
• Online fundraising is one of the best ways for charities to grow their donor database – their fundraising supporters bring them new donors and new fundraising supporters
• Younger generations that have grown up with the Internet much prefer giving online
• Online giving is also very popular with older age groups: e.g. recent studies have shown that online giving is very important for donors aged 60+
• Workplace online fundraisers are becoming increasingly popular with companies: as a way to build staff engagement and to assist to retain / attract staff, particularly with Gen Y (which over the next decade will make up 75 per cent of the workforce).

A bit about Givematcher

Givematcher is a Not for Profit, providing a wholesome online fundraising service that maximises funds raised, for free. Givematcher’s platform is built from the same technology as Twitter to maximise fundraising success – it is fun, user-friendly, social, fully mobile, and collaborative.

In addition, Givematcher has the only fundraising platform with donation-matching built-in. This optional feature gives fundraising supporters the opportunity to make their fundraiser really stand out by inviting companies to match donations to their fundraiser, increasing donor conversions. The matching functionality is also ideal for workplace fundraisers.

Givematcher uses its own fundraising licenses, and is licensed in every state / territory, so now every Australian charity has access to fundraise in every event right around Australia.

With hundreds of charities having secured Givematcher’s free rate in only a matter of weeks, the free online fundraising revolution is well under way.