Update on Changes to how The Good Exchange will manage Platform Service Fees from 1st October 2019

Update on Changes to how The Good Exchange will manage Platform Service Fees from 1st October 2019

1.     Summary

During the 3 years that The Good Exchange has been in operation, we’ve seen huge changes in the way that technology is being used across the charitable sector, especially in the way that it is used to drive crowdfunding appeals.  As we approach our 3rd anniversary, we are making some changes to give all our users a uniquely flexible approach to using and paying for The Good Exchange’s funding and fundraising matching platform.

From 1st October 2019, each fundraising Applicant Organisation that receives money through the platform will hold ultimate responsibility for paying the agreed platform service fees.  Rather than deducting platform service fees before disbursement of grants and donations to Applicant Organisations, we will now collect platform service fees due via a straightforward direct debit collection on a monthly basis (and only when funds have been generated via the platform and disbursed to an Applicant Organisation).

These changes have also allowed us, in response to many requests from both Funders and Donors, to enable every organisation and individual giving grants and/or making donations through the platform to have the option to contribute to platform service fees.  This means that in some cases, as well as receiving grants and donations through The Good Exchange platform, you could find that all or part of your platform service fees have been paid for you by generous Funders and Donors.

The intention of Gift Aid is to provide a tax free incentive for individuals to give more money to good causes so we’re also delighted to announce that from 1st October, The Good Exchange will provide a completely free Gift Aid collection service.  In addition, the platform will continue to be completely free to use until grants or donations are received and no fees will be charged on any grants that have been raised externally and added to fundraising projects on the platform.

Please read on to find out the full details.

2.     Background

The Good Exchange platform differs from many other platforms in that it actively seeks out and lists funding organisations (Funders) who are then automatically matched to Applicant Organisations’ fundraising projects (which have been created via a single, on-line application form).  The platform facilitates the disbursement of charitable grants as well as enabling fundraising organisations to collect donations and money from fundraising activities.

All our conversations with users and prospective users tell us that our web-based fundraising platform improves the way charities and funders are brought together, enabling more good to be achieved.

As we are owned by a charitable trust (Greenham Trust) and have no shareholders, we are only concerned with covering our costs and continuing to develop the platform. Our goal is to have the most fair, reasonable and simple approach that ensures continued delivery of our valued (not-for-profit) service and continues to attract new Funders. Other providers have different priorities, and work in a variety of ways. Some charge registration and/or membership fees, most charge an administration fee, and many even add transaction charges on top of this fee requirement.

We are making some changes to the way that service fees to cover platform usage are paid, collected and managed  to make the process simpler and easier for all users, to give every organisation and every individual the option to contribute to the cost of fundraising through the platform and to also make it clear where overall platform service fee responsibility lies (which is with the Applicant Organisation that is fundraising).

Find more information on our current fees and charges model.

3.     We asked our users what they thought and this is what they said

Applicant Organisation and Funder users who were registered users of The Good Exchange platform back in May 2019 were sent a survey asking for input on how and who should pay the fees for using The Good Exchange to receive grants, donations and manage fundraising activities.

We’ve reviewed all the feedback (from Applicant Organisations and Funders), looked at the results from our independently managed ‘Applicant and Funder’ technology research and consulted the Board of Greenham Trust and are giving you early information about the changes that we plan to make and the exciting new functionality that will be delivered to you as part of this change.

You will be receiving much more detailed information about our plans going forwards, but in the interim, this page contains an outline of the most relevant feedback, the changes we are planning and the new user functionality that is coming.

What our users told us:

  1.    92% of Applicant Organisations and 88% of Funders felt that the fees charged should cover all costs (i.e. no additional charges for financial payment processing or monthly subscriptions)
  2.    96% of Applicant Organisations and 80% of Funders felt that no fees should be charged on Gift Aid collected
  3.    95% of Applicant Organisations were happy with the current model that no fees are charged on grants that have been raised externally and then added to fundraising projects on the platform
  4.    94% of Applicant Organisations wanted improved financial reporting
  5.    69% of Applicant Organisations agreed that the Applicant Organisation raising funds should be responsible for paying the fee
  6.    36% of Funders felt that they should be responsible for paying the fee
  7.    81% of Applicant Organisations and 85% of Funders wanted Donors and Funders to be able to pay the Applicant Organisation’s fee on their behalf.

4.      How will the platform work going forwards?

Starting on 1st October 2019, whilst the platform will continue to be free to use until a fundraising project receives a grant and/or donation, Applicant Organisations will hold overall responsibility for paying the platform service fee. This is typically set at 5% + VAT for use of The Good Exchange platform’s matching and donation service.

From 1st October 2019 we will disburse all (100%) of the monies received from grants, donations, Gift Aid and fundraising activities (i.e. we will no longer deduct the platform service fee prior to disbursement). As all monies raised will now be passed to the Applicant Organisation, we will be changing the way that platform service fees are collected.

Disbursement of 100% of grants paid through the platform is important to many Funders and will help us to continue to grow the value and reach of grants available through the platform.

As part of this change, we will:

  1.  Unlike many other platforms, no longer charge a platform service fee on our Gift Aid management service (you will receive all the Gift Aid we claim on your fundraising project’s behalf completely free of charge)
  2.  Continue with the current model of charging no fees on grants that have been raised externally and then added to fundraising projects on the platform
  3.  Continue with the current model of including all bank transaction charges for donations and grants within the platform service fee (not charge an additional extra fee to cover these charges as is the case with some of the other crowdfunding platforms).

5.       Funder and Donor Fee Contribution

Funders and individual Donors will be able to contribute all or part of the fee for any fundraising project to which they give a grant or make a donation through the platform. This could mean that your organisation pays no fees at all! (According to Virgin Money Giving, 85% of donors have chosen to add payment of the fee to their donations since it introduced ‘the donor covers the fee’ option towards the end of 2018).

6.       How will The Good Exchange Collect Service Fees Due? Through Post Payment Collection

Instead of collecting the 5% +VAT service fee before monies are passed to the Applicant Organisation (see above), any fees due in a month that have not been pre-paid by Funders and/or Donors will be collected on a monthly basis.

Any platform service fees due will only be applied to disbursement amounts paid out in any given month and will be deducted after a disbursement has been made.

Platform service fees will be paid through new Direct Debit functionality. You can find out more about the sign-up process and download the ‘How-To- Guide and Direct Debit Mandate for completion here.

Please note:

  1.  The Good Exchange will never collect more in platform service fees than what is due in a single month
  2.  We will never ask Applicant Organisations, Funders or Donors to pay more than the 5% +VAT platform service fee
  3.  We will not ask Funders, Donors and Fundraisers for a ‘tip’ that we keep for ourselves.

7.       New Feature Summary

  1. Enhanced financial reporting for Applicant Organisations including detailed daily donation and grant reporting
  2. Free Gift Aid management service – no service fee charged for collecting Gift Aid due on donations received through the platform (5% fee charged by other leading platform)
  3. Funder and Donor platform service fee contributions (up to 5% +VAT of the amount they give an Applicant Organisation’s fundraising project)
  4. Any excess fee contributions received transferred directly to Applicant Organisations when their fundraising project has been completed

8.       What services does The Good Exchange include in its single platform service fee? 

  1.    Platform completely free to use for Funders and donors unless they elect to contribute towards the Service Fee
  2.    Applicant Organisations do not pay a platform service fee until a fundraising project receives a grant and/or donation (no sign up fees or monthly/annual subscriptions)
  3.    Customised on-line dashboard – manage, update and see the status of your fundraising project(s) in one place,
  4.    Find new funders service – we are constantly adding new funders with new grants to which all relevant, live fundraising projects will be automatically matched (via their single on-line application)
  5.    No service fee on externally raised grants paid into the platform (which may then be matched and also reduce the service fee payable)
  6.    Free Gift Aid collection service
  7.    Personal Help and Support (speak to the team on the telephone, e-mail and on-line)
  8.    ‘How To Use Social Media’ training webinars and built-in social media ‘share’ functionality including Facebook, Twitter, WhatsApp and Instagram for driving donations and awareness
  9.    Promotion of your fundraising projects through social media by The Good Exchange (contact us at: info@thegoodexchange.com for information about PR and case study opportunities)

9.     When will the new processes and functionality be introduced?

We expect that these changes will be available on 1st October 2019 but all of our users will be kept fully updated in the meantime!

If you have any questions, please contact our Customer Services team: support@thegoodexhange.com