A Fresh Look @ Costs of Online Giving

The first decade of the 21st century has seen a meteoric rise in the levels of charitable giving due in part to massive disasters like 9/11 and Hurricane Katrina. In 2006, charitable giving reached $295.02 billion, according to Giving USA 2007, the yearbook of philanthropy published by Giving USA FoundationTM and researched and written by the Center on Philanthropy at Indiana University. Charitable giving en masse was up 4.2% after inflation.

Online giving, on the other hand, has been rising much more quickly.
2006 donorCentricsTM Internet Giving Benchmarking Analysis released a study last year that demonstrated online donors had grown at an average of 101% over the previous three years vs. 6% for offline donors. 56% of online donors, in fact, made their first contribution.



What's the Story w/ Online Donations?

Mpayy has an open offer to process online donations for free, i.e. with zero transaction costs. There are a number of sources both for online donations, and researching non-profit companies, and what they do with their money.

Network for Good and FirstGiving are two companies that provide platforms for non-profits and charities to accept donations. FirstGiving is the US version of JustGiving, a British company that allows the similar collection of donations. For those charities and non-profits, the charity director must contact the company, which consults an online resource called GuideStar, which collects the 1099's non-profits must file with the IRS. From GuideStar, when someone researches a specific charity or non-profit, they are one click away from making a donation to the charity.

Further, the facebook group, Causes,, lets donors click through to Network for Good to make their donation. Causes has approximately 80,000 daily users, which is #74 on the daily users list, and #20 on the total number of installs, according to Adonomics.



According to sources, Network for Good charges 4.75%, while FirstGiving charges up to 7% in transaction costs to the charities. In other words, only $0.93-0.9525 of each dollar of a donation actually reaches the charity. Network for Good, in fact, doesn't actually get permission from charities, but rather has an opt-out program if charities do not wish to have Network for Good collect donations for them. According to the FAQ's on the Network for Good's website, they send the money on to the charities through electronic funds transfer or a paper check on the 15th of every month.

So, in other words, the Network for Good is taking 4.75% and then holds the money for up to 31 days before moving it on to the charity. Network for Good is itself a non-profit, but those fees and the benefit of that negative float provide serious financial benefits to Network for Good far above the cause to whom the donor actually wanted to provide money to.

There are other companies, like Acteva and Blackbaud, that do the same thing, but also provide a number of online promotion tools, including database management and event registration items.

Mpayy Free Donation Processing

Mpayy's offer of free donation processing obviously benefits Mpayy in the form of account opening, but even if we were to charge the charity, we would charge $0.20 + 2.00% or less for a Mobile Merchant or Retailer Pro account. Further, as Mpayy hits critical mass, we create the ability for someone on stage to ask 50,000 people to give $1 a piece to Save Darfur with their cell phones, and it will happen with no fees for the charity.

Mpayy is in talks with a number of charities - small and large alike - and has approached a number of the organizations listed here. The question is, as a donor, do you want your money - ALL OF IT - going to the charity, or to the platform provider?