As I’ve shared in one of my previous post, Skolafund is run and maintained by a small group of university students. There are costs to running Skolafund, for example hiring of developers and cost of making online money transfers. Yup, for every single sponsor that you & I make for a student, there is a charge that the service provider (MOL Pay & Paypal) charges. Our team has been absorbing all these costs for the past few months. We did this for a few reasons, one of it is because we thought we could secure grants and fundings from organisations, institutions or angels and explore other ways to monetise and stay sustainable. It was kind of naive for us to think so. Unfortunately, till today, we received no external funding except for the grant from SBC FinTech accelerator. It will keep us afloat for a few more months. Like real few. Haha.
After much discussion and getting the opinion of others, we figured that the only way for Skolafund to stay alive is to start making our own revenue. We studied the other crowdfunding sites and came out with a plan to generate some money for the platform to stay online and perhaps prosper with enough support. Once we launch the new website, we will be “charging” 5% from successful campaigns on top of the 3% transaction charges by the service provider MOLPay and Paypal.
So what does this 5%+3% mean?
5% – We will only be getting this 5% if a student’s scholarship is fully-funded. Means Skolafund will only gain when a student in-need gets a scholarship on Skolafund.com. How big is 5%? If you sponsor a student RM 100, only RM 5 goes to Skolafund while the rest goes to the student (if the scholarship is 100% funded, if not, we get nothing). The money that we get will be collected and used to develop and scale Skolafund.
3% – This will be used to pay bank and payment gateway (MOL Pay and Paypal) charges for each transaction made. To make sponsorship using Maybank2U, CIMB Clicks, RHB Now and other methods on Skolafund, there are charges that our team has been paying. Sadly, we’re still students with very little money so we cannot afford to pay for them any further if we want to keep Skolafund alive. This 3% will be used to pay for this transaction and technical costs (not for Skolafund).
So , if you sponsor RM 100, there will be 8% charged on that – RM 8. This RM 8 goes to cover the areas mentioned and the rest goes directly to the students. Hope this small sum will not stop you from sponsoring students on Skolafund. They are necessary for Skolafund to continue its operations. With your support, we can create more features to make higher education affordable and eventually explore making revenue from other sources and perhaps one day, eliminate the need to charge this 8%.
We are sharing this with you because we want to keep things as transparent as possible. At the same time, we also value your feedback. If you have suggestions on how Skolafund can be sustainable and scalable financially, we would love to hear them. Feel free to drop me an e-mail at [email protected] or DM us on twitter! We really appreciate all the support that you have given us thus far and we hope you will continue to be with us throughout this journey. Thank you, everyone.
Sourcing out the transaction fees is normal, and should be done. SkolaFund cannot survive if everything is absorbed by the team, UNLESS there is enormous funding or grant from someone else.
What I can suggest is that, for both the 5% fee and 3% fee, you can give donors the option whether or not they want to absorb the fee themselves or not.
What does this means?
I’m referring to an example by GiveForward (another crowdfunding site).
GF gives the donors the option of covering the fees if they want to. GF’s fees are currently 7.9% + $0.30 per transaction.
So if someone wants to donate $100 for a campaign on GF, they can either pay a total of $100, which $8.44 will be used to cover the fees, and the recipient will only get $91.56. They can also opt to ‘cover the fees’, which means that the recipient gets the intended $100, and the donor pays a total of $108.44 instead.
I find this to be a useful option and feature to have, if you guys have the capabilities to do so. It’d give some flexibility to it. Some people may have limited sources to donate, thus would not opt for that. Others, however, may have a few extra dollars to spare to cover the fees.
Just a suggestion for you guys to think about… 🙂
That’s a great suggestion, Nazu! I believe it can be implemented. Glad that you are open to this idea. 🙂