Online payment processing opens up to social enterprises

| 19th Dec 14

Online payment processing company, Charity Checkout, has announced that it will now be accepting social enterprises and micro-charities charities.

Until now, charities have been required to register with HMRC or The Charities Commission before they can be permitted to join. Similar restrictions limit social enterprises from accessing sponsorship fundraising websites such as Virgin Money Giving.

It is a common misconception that all charities are registered with the Charity Commission. In fact, only around 160,000 of the estimated 350,000 charities in England and Wales are registered.

Of the unregistered charities, around 80,000 fall below the threshold for registration, currently set at an annual income of £5,000.

These rules have led to many small charities struggling to grow, as charities are required to raise at least £5,000 before they can register with The Charity Commission. In a recent review of this threshold, Lord Hodgson suggested that very few small charities with incomes beneath £25,000 would deregister if the threshold was raised from £5,000 to £25,000.

He argued that, instead, the “overwhelming result will be charities below £5,000 revenue rushing to register“. This is widely considered to be a result of the increased reputation and access to services available to charities registered with The Charities Commission.

David Bartram, Ventures Manager at UnLtd points out, “It can be a catch-22 for many new charities and social enterprises as they are often too small to register as a charity, yet unable to access payment services without that all-important registered status. This leaves them unable to secure the initial funding required.”

The recent change in policy from Charity Checkout comes at a time when crowdfunding sites such as Kickstarter are reshaping the fundraising landscape for good causes and individuals alike.

Chester Mojay-Sinclare, founder of Charity Checkout says that, “These days anyone can set-up a crowdfunding appeal, yet accepting donations directly has always been difficult for the smallest charities. We aim to make online payments accessible to all good causes, and even offer discounts for smaller organisations to ensure this.”