British Banks and Credit Card Companies to Surrender Tsunami Profits

The internet and credit cards have revolutionized the way non-profit organizations raise money. Howard Dean proved this in politics, and thereby, scared the bejesus out of the Democratic establishment. And global charities have been gobsmacked by the money that has poured in from the ‘net. When £300,000 donated to help Banda Aceh wound up as commissions on bank ledgers, the outcry shamed the banks and credit card companies of Britain to give the money to those for whom it was meant.

Charitable giving is meant to alleviate some unacceptable condition, whether it is hunger, disease or ignorance. The donor wants a problem solved and wants the money get to the starving, the sick or the bright mind eager to learn. Inevitably, one cannot get 100% of the money there. Even charitable organizations have overheads. The American Red Cross, according to its IRS filings, burns 9 cents on the dollar for administration and fund raising. It is an unfortunate reality, but everyone understands.

What isn’t understood by many is that British credit card companies charge as much as 3% commission on credit card donations done by phone or on the internet. Well, needless to say, when this came out, the charities howled. The £300,000 in commissions that came in would buy enough storage tanks, for example, to provide drinking water for 420,000 people.

The political leaders of the country joined in almost as soon as the facts came out. Jim Cousins, a Labour MP and a member of the Treasury select committee, said, "We are seeing an almost once-in-a-lifetime display of popular feeling. It would be plainly ridiculous, and very bad business, for the banks not to realize that. They have got to pack it in and waive these charges." The Liberal Democrats’ Vince Cable was even blunter, “It would be completely unacceptable for companies to be seen to be making money out of this.”

So the Association for Payment Clearance Services, the UK industry group, put out the following in a press release:

Our industry acted quickly last week to ensure that all charitable contributions to the central Disasters Emergency Committee in the UK would incur no credit or debit card charges, thus ensuring that in each case the amount donated by the cardholder would be the amount received by the Committee.

Today, our members have also agreed to waive card charges on tsunami-related donations made to individual charities.

Both sets of waivers will be backdated to apply to donations made from the time of the disaster.

Many of our members have already made significant donations of their own but we are all united in delivering this additional contribution to the charitable efforts of the British public.