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Sithara's avatar

I think its important to look at the bigger picture and not just Launchgood in a vacuum. Launchgood is a big contributor to what seems to be Muslim charity space thrives on a lack of transparency and seems to be circulating substantial % of donor funds amongst itself.

I share several examples below to illustrate this.

For all the examples below, lets assume that we are dealing with Sadaqah funds, not zakat (which would make things even more problematic). Therefore funds are fully fungible between admin and programmatic, and between campaigns.

Lets take Brother Abdullah's example below (and thank you very much for your detailed response):

He states:

"I paid $3,000 and raised $19,000 - my fees for marketing was $3,000 and my fees for the bank was $570 - so total $3,570. Not 50% at all." So, launchgood fees were about 19%.

Then, below he says:

"We have an admin percentage of 15%. So we would take that $2,850 top it up and then buy another package."

So, taking into account both launchgood fees and his own organization's admin fees, 34% of the donation does not go to the end user, or what was advertised to donors in the campaign. About 68%, of $12,540 (at the absolute maximum, I would imagine), goes to the end user.

Do the donors know this? Do they know if they donate $100, only about $68 at the maximum goes to the intended campaign?

My intention is not to pick on Brother Abdullah or his organization here; what he is illustrating is just standard practice for the Muslim charity space. And his organization is likely doing far better than others.

We can see this with another typical example of Islamic charity space:

Lets say I have a multimillion dollar international organization. I pay $45,000 in fees to Launchgood, and $5,000 in bank fees for an orphan sponsorship campaign. So, total costs of the campaign in Launchgood is 50%, or $50,000. In return, I make $100,000 in donations.

My organization's admin fees are 35%. So, that leaves %15 left, or $15,000.

Then, I grant this $15,000 to a local country organization that actually does the work They take another %10 in admin fees. That takes away $1,500, leaving $13,500 that actually goes to orphans, who the original advertising campaign aimed for.

So, of the original $100,000, about 86.5% is eaten away by Launchgood fees and various organizational admin costs, leaving $13.5% or $13,500 going to the intended end-users, the orphans.

If someone donates $100 in sadqah to my campaign for supporting an orphan, only $13.5 goes towards the orphan. The donor certainly does not know this, and I can only imagine would not be okay with it.

Why should any average Muslim, whose is required to pay zakat and is highly encouraged to pay sadaqah to support the poor (especially orphans) be okay with such a situation?

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Anonymous's avatar

As someone who has donated to different campaigns on launchgood over the years, im shocked to read this. Yes, Launchgood needs to make money, but my concern here is the lack of transparency.

Up to $50k to be featured in an email on the last odd nights of Ramadan? What?

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