Every charity professional knows the bittersweet feeling of a one-year only grant.<\/p>\n
The influx of cash allows you to hire staff and launch a bold new program. It\u2019s exciting \u2014 until month nine hits and the funder has changed their priorities. Suddenly, you\u2019re stuck. You\u2019re left with a community that relies on you, staff who need a pay-cheque, and a program that is about to vanish overnight because the funding wasn\u2019t designed to last.<\/p>\n
Right now, the charity-tech market is full of offers that look exactly like those short-term grants. <\/strong><\/p>\n New startups are promising zero-fee models and flashy features that feel like a windfall for small to mid-sized charities. But here is the reality: many of these companies are funded by venture capital, not by sustainable growth. They are sprinting to show numbers to their investors, but they haven\u2019t planned for month thirteen.<\/p>\n You may have come across some of the high-profile stories out of the U.S. recently.<\/p>\n American companies working in our \u2018tech for charities and non-profits\u2019 niche that have either shut down unexpectedly or gone bankrupt.<\/strong><\/p>\n These stories have raised some hairs across the charity-tech world \u2013 and rightfully so.<\/p>\n Let\u2019s circle back a few stages.<\/p>\n Upstart tech companies targeting charities have stormed onto the marketplace.<\/strong> On one hand, this signals that it\u2019s an exciting time for our sector, that the tech for charity space is burgeoning.<\/p>\n On the other hand, an influx of new competitors raises red flags for a company like CanadaHelps, which has been making tools for charities for over 25 years.<\/p>\n Here\u2019s the catch: companies that \u2018love bomb\u2019, or over-promise and offer zero platform fees and no upfront costs at the beginning require scrutiny<\/strong>. Ask yourself:<\/p>\n Over the decades we\u2019ve been around, CanadaHelps has seen many charity-tech competitors rise and fall. <\/strong><\/p>\n Many started out with grand offers, bold innovations or sweeping promises like big savings \u2013 only to vanish within the same decade they began. Ultimately, these upstarts could not create long-term viability. <\/strong><\/p>\n CanadaHelps can. Here\u2019s why: our motivations are different.<\/p>\n Unlike many of our competitors in the charity-tech landscape, CanadaHelps is driven by a different model.<\/p>\n We partner with charities and work side-by-side to drive lasting impact for charities. <\/strong><\/p>\n CanadaHelps is a charity ourselves. Not just another fundraising tech startup. CanadaHelps operates to uplift the success and growth of the Canadian charitable sector as a whole. We pass on transaction savings to charities, provide free educational materials for charity professionals, and publish the Giving Report each year.<\/p>\n We aim to help Canadian charities thrive, not just fulfill investor agendas or maximize short-term profits. Here\u2019s how:<\/p>\n New fintech companies with investor funding can offer charities big promises at the outset, but their business hasn\u2019t proven itself to be lasting yet. <\/strong><\/p>\n Their operations may scale quickly or demonstrate short-term growth, but when the economic climate turns, or private capital dries up, these companies can become ticking time bombs. CanadaHelps\u2019 is funded through the transaction fees.<\/p>\n Our financial situation is not dependent on investors or private equity money.<\/p>\n American companies often charge into the Canadian market aimed for takeover, only to realise that Canada doesn\u2019t have enough profit potential to make the investment worthwhile.<\/p>\n CanadaHelps is a Canada-only operation with deep roots across the country. We make our services bilingual (English and French) for charities that use our tools, and for donors who give. We\u2019re staying put. There\u2019s no threat of us exiting the Canadian ecosystem.<\/p>\n Pricing models in our sector vary widely \u2013 from zero fees, to monthly fees, to a blanket percentage-based fee that is taken off each donation, which is how CanadaHelps operates. This model ensures CanadaHelps\u2019 fees are applied consistently, in service of maximizing the amount that goes to the charity, and that we foster financial predictability for our organization.<\/p>\n Consider these factors as you evaluate the pros and cons different pricing models.<\/p>\n While tip-based models may appear to be a cost-effective choice, diligently check that the costs are not simply showing up elsewhere.<\/strong><\/p>\n In tip-based donation models, a massive percentage of the tip usually goes to the financial processor, not the charity. Donors do not receive a tax receipt for this tip amount.<\/p>\n Charities also face the risk of getting dropped by the processor, if donors aren\u2019t tipping enough. Additionally, many Canadians experience \u2018tip fatigue\u2019 and may actually prefer the donation experience of a steady, consistent fee.<\/p>\n Assess the risks associated with each donation processing company.<\/strong><\/p>\n Sudden platform failures, shutdowns, or account holds can result in major financial losses for charities. Account freezes or \u2018lockouts\u2019 are real risks if the company processing your donations goes under, or \u2018skips town\u2019.<\/p>\n The charity-tech companies that went under recently took donation dollars down with them<\/strong> \u2014 recklessly jeopardizing the trust of the charities they serve, and threatening their ability to pay staff and run critical services. For a sector like ours that often operates on immediate cashflow for necessities like payroll and programming, actions that result in financial losses are particularly egregious.<\/p>\n As the charity-tech niche continues to blossom, more startups serving charities and nonprofits will likely enter the Canadian landscape.<\/p>\nStartups Begin With Bold Promises<\/h2>\n
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The Partnership Model<\/h2>\n
Long-Term Sustainability<\/h3>\n
Tailored for the Canadian Market<\/h3>\n
Unpacking Donation Pricing Models<\/h3>\n
The Trouble with Tips<\/h3>\n
Risk Evaluation<\/h3>\n
Protect Your Charitable Organization<\/h3>\n