Article

Cashback Fundraising – What you need to know

18 October 2021

Cashback Fundraising is a simple type of passive fundraising where making purchases online results in donations to your cause or charity. It is a form of affiliate marketing where online stores pay a commission for purchases that have been made after the shoppers are referred there via a specific site.

These are some of the main sites in Australia: ShopNate, Cashrewards, YourChange, School Buy and ShopItForward.

This article is a detailed explanation of the sites, how they are similar and what differentiates them. It’s a lengthy read but will help you understand what each site offers.

How does cashback fundraising work?

All operate in a similar way – they are an umbrella organisation of mainstream online shops, which reimburse your school or charity with a percentage of all sales made via their site. Each incorporate hundreds of online shops, and they include some of the biggest-name companies which every Aussie is familiar with, such as Dan Murphys and Freedom.

It’s a very simple process – first you sign your school or charity group up with the site as a recipient, and then tell your community to create a personal account. Every time they shop at one of the many online stores via the cashback site, their school receives a donation. Many of the sites also offer a range of constantly changing coupons and discounts which you can use to promote to your fundraising community.

The signup process for most sites is very similar and takes only a few minutes to fill out an online form. Approval is not automatic and may take a few days. The type of information you will need to provide includes the details of your school/charity, bank account details (where they will deposit your donations), and contact details. You may be asked for a logo or image so your supporters recognise your school. You may be asked to provide an ABN, proof of not-for-profit status or similar.

Most sites provide marketing resources such as email and social media pro forms and images which you can use to promote to your school/club community. Some sites have reminder apps for your computer and mobile so that when people are browsing online, they are alerted to the fact that the store they are looking at will give a donation to their charity. Also, a number of the sites provide constantly changing coupons, specials and discount codes, which means you can easily promote these new deals to your supporters.

It’s not limited to schools – Most sites don’t restrict charitable recipients to just schools – they will accept a huge variety of causes such as daycares and playgroups, sports clubs, animal care groups, youth associations, scouts/guides, social clubs (chess, dance etc) and some sites will even accept individual challengers who are raising funds privately for a charity.

What major retailers do they represent?

Cashrewards – over 2,000 stores including Household names and staples, such as Coles, Woolworths mobile, eBay, Liquorland, The Good Guys, Groupon, BCF, Dan Murphy’s, David Jones, ASOS, Myer, Virgin Australia and The Iconic.

Shopnate – over 600 stores including eBay, Wooloworths, Petbarn, Smiggle, Expedia, Ali Express, Bed Bath and Table, Edible Blooms, Contiki, Priceline, BCF, Reid Cycles, Mr Toys Toyworld, Youi, Hard Yakka, Swarovski, Michael Hill, Menu Log and many more.

Your Change – over 160 stores including Freedom, Dell, Hard to Find, BooHoo.com, Cellar Masters, Dusk, Mossimo, Wiggle, Body Shop, Vista Print, Estee Lauder, Amcal, Hard Yakka, Rockmans, Hush Puppies, Hotels.com, Booktopia, Jurlique, Kikki K, Living Social.

Shop It Forward – over 500 stores including top retailers eBay, Woolworths, Booktopia, Expedia, The Iconic, Dan Murphy’s, Lorna Jane, Oxfam and Nude by Nature.

SchoolBuy – over 200 stores including Bonds, Booktopia, David Jones, Expedia, Priceline, StrawberryNet, Edible Blooms, Sportscraft, Woolworths and more.

What percentage of my purchase price do they offer as a cash-back to my charity?

With the exception of CashRewards Community which operates under a different process, all the sites work in the same way. When you make a purchase on one of their promoted businesses – for example Woolworths – your charity will receive a % of the purchase. The % your fundraiser receives is different depending on the business and the cash-bask site you go through, but it can vary from 0.5% to over 20%. On average your fundraising group can expect to receive a donation of between 3-5% of your purchase price. For example, on a $100 purchase, you might expect your charity/school to receive a donation of around $3.

CashRewards Community is different, because individual shoppers keep 100% of the cashback themselves, while CashRewards then donate an extra 1% of that amount to your designated charity. See below for more information.

How do the sites differ?

Shopnate

Shopnate is the biggest of all the Australian cashback fundraising sites, with almost $1.8million donated to causes by July 2019. They have two reminder apps (one for your laptop and one which can be downloaded straight to your phone), which helps shoppers know when they are looking at a store which offers a cashback donation. It depends on your supporters actually agreeing to download the apps, but if they do, it’s hugely beneficial because if they’re browsing for something and one of the sites they look at will give your fundraiser a donation, it will let them know. It means that your supporters don’t have to know all 600 stores off the top of their head and you will never miss out on a single donation.

Shopnate also offers a referral program, where if you send the link to another good cause (ie another school or fundraising group) and they sign up with their own supporters, your cause will be given 20% of what they raise in their first 12 months.

Your Change

You can elect to sign up as an individual or a business account when shopping. The difference between the two is that if you are an individual, you can choose to keep 50% of your cashback for yourself and donate the other 50% to your chosen charities. You can also nominate up to three charities, between which your donation will be split evenly. A business account, where 100% of the donation goes to a registered charity/cause is suitable for businesses or companies (or individuals) who may do online shopping and wish to donate to a good cause.

Cashrewards Community

Cashrewards Community is considerably different as it is built on the back of the well-established Cashrewards site which lets shoppers keep the cashback themselves. In the Community version, when people sign up to support a cause they still keep 100% of the cashback but CashRewards then donate 1% of that amount to the nominated cause. This means it will be considerably slower to earn money for your charity, but is certainly an option for communities who might benefit in keeping the majority of cashback themselves, while still feeling good about sending a (tiny) portion to your charity.

For example, if your supporter spends $150 each week doing their online shop at Woolworths, earning a 2% cashback, after 6 months, they will have spent $3,900 on groceries, earned themselves $78 in cashrewards, and the charity will receive $0.78. If 100 families do this, you will raise $156 in a year.

They have also developed a notifier which works with your internet browser, which will let you know if you are browsing the website of a Cashrewards retail partner. Like the other reminder apps, this is essential if want to make sure your supporters never miss an opportunity to make a donation.

When can my charity get its payments?

CashRewards Community: Individuals can make a claim as soon as their balance reaches $10.01. Upfront payments ($10 per new active member) and commissions are paid to charities quarterly.

Shopnate: Funds are paid quarterly once a balance of $25 is registered. Balances of less than $25 are rolled over to the next quarter. Note that it typically takes 6-8 weeks for the donation to to be paid after a purchase has been made (even longer for travel/accommodation purchases).

Your Change: Payment may be requested once the balance reaches $10, and the transfer to the designated bank account will take place within 14 calendar days.

ShopItForward: Payments are made quarterly on balances over $25. Anything under $25 is rolled over to the next quarter.

School Buy: Payments can be requested once the balance reaches $50.

It is important to note that some retailers may take up to 3 months to release the donation to the various sites (usually due to the returns period of different retailers), and then it can be a matter of months before the sites pass the money onto the fundraising groups. This is not a fast-moving way to earn money.

It is also important to remember that many sites will consider accounts to be inactive if the person has not clicked through to a business or made a purchase in 12 months. This may cause them to cancel the account.

Tell me about the backgrounds of these companies:

CashRewards Community has grown out of the huge CashRewards site, where shoppers share their cash back commission with their favourite charity or fundraiser.

Shopnate was founded in 2014 by Joan, Athman, Pep and Martyn – with a mission to help Australian causes to raise free funds each time they shop online. To do this Shopnate have invested in Australia’s first cash back mobile phone app so everyone can raise funds on the go.

Your Change was founded in 2015 after the two founders Brenton Gittos and Mattias Persson, became friends after pitching their tents next to each other while on holiday. They have a shared passion for sports, community service and entrepreneurship, resulting in Your Change.

Shop It Forward was founded by mum Karen Black, out of a desire to contribute more to her community, the school P&C association and local charities. Shop it Forward has evolved now into a free national fundraising service for the benefit of any charitable or nonprofit group, school, scouts and non-profit grassroots community groups.

SchoolBuy was founded by brothers, Luke and Dallin Howes, who have designed a number of successful web-based social enterprise businesses.

How does the cashback site make their money?

All sites receive a referral payment from the individual businesses and then pass on a portion of this payment to the charities. Details of the breakdown of these payments can be found in the terms and conditions of the various sites, although some are more specific than others.

CashRewards Community: Every time someone shops through CashRewards, the retailer gives a percentage of the sale back to CashRewards as a referral fee which is shared back with its members.

Shopnate: Shopnate receives a referral fee from each participating company, and once a purchase has been made, 50% of this referral fee is passed onto charities as the advertised donation rate.

In addition, the ‘social/charity shops’ pay a fee to Gifts4Good to be featured on the site and do not pay a referral fee, meaning there is no donation made to your school or cause (although your purchase will go to help someone else).

Your Change: When a request for payment to a nominated charity is made, an administration fee of 2% of the transfer amount or a minimum of 50c per transaction will be deducted from the transferable amount as payment to Your Change. This means if you request a $10 credit, 50c will be taken as a fee, and the charity receives $9.50. If a transfer of $50 is requested, the fee will be $1.

ShopIt Forward: ShopItForward receives a referral fee from each participating company, and once a purchase has been made, 50% of this referral fee is passed onto charities as the advertised donation rate.

School Buy: School Buy receives a referral fee from each participating company, and once a purchase has been made, approximately 65% of this referral fee is passed onto charities as the advertised donation rate, making it the most generous of the sites.