Recently you may have noticed fundraisers popping up on Facebook, or you may have been asked if you wanted to create a fundraiser for your birthday. Considering Facebook boasts over a billion regular users, this new fundraising feature could be a major force, rivalling established crowdfunding platforms such as GoFundMe and Kickstarter. It’s important to understand exactly how the platform works before you get started.
What type of fundraiser can you create on Facebook?
Individuals are able to create two types of fundraiser:
- For charity or a non-profit where the money goes directly to the charity and
- Personal, where the money raised is deposited in a private bank account.
There are a number of categories of personal fundraisers including: crisis relief, education, Health and medical, sports, animals, arts and culture, community and social action. It is important that you are clear what will happen to the money raised, and that you do not mislead donors with regard to how the money will be used.
Examples of how Facebook Fundraising could be used:
- a dance school or gymnastics club raising funds for a team to travel to an interstate competition
- a sports clubs raising funds to purchase new equipment
- a group raising funds to purchase plants for a school kitchen garden
- an individual raising funds to buy dog food and toys for a local shelter
- a campaign is set up to raise funds for a graduating year group to purchase a gift for the school
When you start a fundraising event using Facebook, it creates a page much like a Facebook event, that people can and follow. This means you can update your supporters with news and images and people can donate to your cause directly through Facebook. The obvious benefit (for Facebook anyway) is that it keeps your donors inside Facebook, and they do not need to click out to another site to learn more or make a donation.
Which charities can I support?
Australian charities include: Kids With Cancer, RSPCA, Lifeline, Black Dog Institute, Starlight Children’s Foundation, Asylum Seeker Resource Centre, Royal Flying Doctor Service, Make-a-Wish Foundation, Beyond Blue, National Breast Cancer Foundation, Golden Oldies Animal Rescue and more.
Who can create a Facebook Fundraiser?
Only people living in certain countries can create or donate to Facebook fundraisers. People living in Australia, the US, the UK can create personal fundraisers, charitable fundraisers and donate to fundraisers.
Interestingly, people living in New Zealand can create personal fundraisers but not charitable fundraisers. Check the full list here.
You must obviously have a Facebook profile or page and you must be 18 years or older.
Can schools and P&C/P&F use Facebook Fundraisers?
I would strongly advise you get advice from your state body regarding the use of Facebook fundraising. Check here for your state body.
Facebook Fundraisers are only available for use on certain Facebook pages and profiles – namely individual profiles or pages for verified brands and nonprofits. Therefore it is unlikely a public/Government school or P&C/P&F is eligible and there is no evidence of a state school using Facebook Fundraising under their own name, although there are some private/special schools using the platforms to raise funds for building funds.
However this does not stop an individual using their own profile to set up a charitable fundraiser and sharing it with members of the school community, nor an individual setting up a private fundraiser where the funds are used to benefit a school in some way.
An example of this would be an individual starting a Facebook Fundraiser to raise money to buy the netball team new uniforms. The individual would create the fundraiser, share it with friends and families on Facebook. They would collect the funds into their own personal bank account, use the money to buy the uniforms and then donate the uniforms to the school. It’s advisable you speak with your P&C/school before doing this, especially if it involves using the school name on social media.
Are there any costs involved?
If your fundraiser is for a charity, Facebook covers all the processing fees, which means 100% of the money raised goes directly to the charity.
Personal fundraisers are subject to fees, which incorporate both payment processing and in some cases special taxes.
In Australia, the fees for personal fundraisers is 1.77% plus $0.33AUD per donation.
In New Zealand, the fee is 2.99% plus $0.35NZD per donation.
In the US the fee is 2.6% plus $0.30USD per donation,.
In the UK the fee is 1.5% plus £0.24 per donation.
Please note, money collected on personal fundraisers may be taxable, depending on the intended use and amount received. It’s advisable to get personal tax advice.
How are Facebook Fundraisers different?
The minute you start clicking around on Facebook fundraisers, you will notice when one of your friends has donated to a particular cause. For good or bad, this creates a public record of who has donated to what cause, which can either encourage (or guilt) others into donating as well.
The downside to Facebook Fundraising is that it is obviously only open and available to people using the platform. You can’t share your fundraiser outside of Facebook, and without an account, people who are not on Facebook won’t be able to see your campaign, nor be able to donate.
What is the Donate button?
The Donate button has been around for a number of years, and allows approved non-profits to create a direct link on their Facebook page, post or advert for supporters to make a one-off or regular donation. The Donate button is different to Facebook Fundraising which is available to individuals.
It is important to understand that all money donated to charities via a Donate button actually goes to the PayPal Giving Fund Australia (which itself is a registered charity) and then the money is dispersed onto the specific charities, in a two-step process.
What is a Birthday Fundraiser?
You might notice in the weeks leading up to your (declared) birthday, Facebook might ask if you want to set up a Birthday fundraiser, where you can ask friends to donate money to a registered charity (you don’t get to keep the money and buy yourself a present, sorry). You can choose from a number of pre-approved non-profit/charities. If the charity you want to support isn’t on the pre-approved list, you can set up a personal fundraiser and send the money raised yourself.
United States only: the organiser of the Birthday fundraiser, you can pledge to match donations, so if your Gran donates $10, you pledge to match that and donate another $10 to your cause. You can choose the donation amounts you want to match (up to $2,500) and you can also pledge the total amount you are willing to donate. So if you pledge to match a total of $250 and your Birthday Fundraiser actually raised $350, you only need to match the first $250. This is done by providing a credit card when setting up the birthday fundraiser. You will be charged automatically, so don’t offer to match donations if you don’t intend on following through.
How do you receive payments from a personal fundraiser?
When you set up your fundraiser you nominate the amount you want to raise as well as the closing date. You also need to provide the details of the bank account you want the donations paid into (please note only certain countries are eligible for this).
You start receiving payments 8 days after your first donation is received. It comes from Stripe – the payment processor – into the bank account you have nominated, although sometimes bank processes can delay this for further, up to five days.
Do donors get a tax receipt?
When the donation is made to a charity, your supporters will receive a payment receipt via the email listed on their Facebook account. This can then be used, where appropriate, for a tax deduction.
Donations to personal fundraisers are not eligible for tax deductions.