How Launchgood keeps up to half of your charity for itself without telling you

You did not know they did that? That seems to be fine with Launchgood.

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Launchgood (LG) is now a ten-year-old American company with an international presence. It has matured into the go-to place for American Muslims who want to give charity but don’t really have any idea what a good charity may be. Why not rely on the collective wisdom of the crowd? If everyone else is doing it, it can’t be so bad, right? 

Donors are misled by the “we work for tips” schtick 

Launchgood is not a charity nor is it a public service. It is a business and it exists to make money–and from the looks of things, lots of it. A donor may be confused by this, as Launchgood takes no “platform fees” anymore (they used to, but that’s a different story)- you pay them a tip if you feel you like the platform and the service they are providing. Their customer support page explains this:

Here’s the thing though, even if you don’t make the $1 “contribution” to Launchgood, on the most visible campaigns you are likely to donate to, the company may be effectively getting between a quarter to half of the contribution (and potentially more) that you thought you were giving to the charity, for poor people and human needs. The company is misleading donors by claiming that they “rely” on donor contributions. That is simply not LG’s business model.

How can Launchgood get so much of your donation without telling you? 

There are typically a few ways a donor ends up on the Launchgood website. A charity may have sent the donor a link to their LG campaign directly, or a friend that donated to an LG campaign may have encouraged you to also donate via email or a social media post. This may count as getting to the website "organically."  While some campaigns can become viral on social media, especially if a celebrity gets behind it, most won’t. A Ramadan campaign by a charity you have never heard of that wants to end hunger in Ramadan with staged stock photography probably won’t go viral organically. Launchgood, with over 7,000 campaigns at any given time, is almost always littered with campaigns from charities and other causes that get almost no donations at all.  

If you want your LG campaign to work, you will want LG to be on your side promoting your campaign and put your campaign in front of Muslims who get LG’s emails and visit the website, or a donor who just donated (or almost donated) to something else and an algorithm encourages them to donate to an advertised campaign. LG won’t do this for your charity to be nice. To avoid being buried under LG’s veritable petri dish of thousands of often good, but frequently low-quality and sometimes scammy collection of campaigns few people will actually see, let alone donate to, you need to pay Launchgood to market for you. If you want to get any traction on their platform, you need to pay them well.  

Launchgood is a Charity Solicitor 

LG’s business is to solicit and promote charities that pay them to do that. The more money that a charity pays them, the more revenue they tell the charity they can get for them. The company claims to have a “unique algorithm” that effectively amounts to a sales commission of between 25-50% of the donation. There is no downside since LG offers a money-back guarantee. If your charity pays LG $50,000 and your campaign does not make any money, LG will give you $50,000, that is of course, unless the company decided, after they ran your campaign and took your money, that your campaign was poorly conceived and lacked quality, which is, unfortunately, a common malady on the platform. 

How Launchgood profits from your donations: The Bondh E Shams example

LG’s marketing package for 2023 provides an excellent example of the type of value they provide to nonprofits, including obscure organizations with no track record or even non-Muslim organizations that want to pull on Muslim heartstrings with slick marketing during Ramadan. They provide an example of Bondh E Shams, which, according to LG, provided clean water for 1 million people in Afghanistan, Yemen, Pakistan, and Bangladesh. This organization has an ongoing campaign on the platform right now as well. 

This is a screenshot from a PDF Launchgood makes available to advertisers for Ramadan 2023 (1444 AH).

According to LG, the organization received, through its LG campaign, a total of $420,047-a 3.2X return on investment, which means Bondh E Shams paid LG $131,265. This is all the more impressive because the organization’s most recently available 990 shows Bondh E Shams raised only about $90,000 in 2020.  Bondh E Shams is registered both in New York and in the United Kingdom, and their UK affiliate raised about 124,000 British Pounds in 2021 (about $149,000 dollars). 

This organization somehow managed to provide clean water to 1 million people in Pakistan, Afghanistan, Yemen, and Bangladesh on a shoestring budget with apparently no employees.  

The 10,634 Muslims who donated to this campaign, which evidently is LG’s dream scenario, effectively paid 31.25% of a charitable donation of their contribution to LG for marketing to them, without ever being told this is what happened. This cost is before any overhead the “charity” itself may have. Now in the case of Bondh E Shams, it may not be much, since their tax forms show they spent only $418 in 2020. 

LG seems to know its audience, and they have the marketing heft with the Muslim community to turn even sketchy-looking nonprofits into superstars on its platform. It’s actually quite impressive. 

Ramadan manipulation is ON

As a fundraising solicitor, Launchgood will try to manipulate donors based on what they know about their audience. They probably know a whole lot more than a Ramadan banquet speaker. Muslims who contribute to a campaign or provide their email, or interact with the platform in various ways are going to be marketed to using religious-sounding appeals. 

In Ramadan of 2023, to be featured on LG’s website and get the benefit of LG’s knowledge of you, nonprofits (and other organizations with no tax-deductible status) are going to have to pony up.  According to LG’s charity marketing materials:

Night of Power and Profit 

Organizations pay handsomely to be featured in the LG email newsletter.  Sending an email to you on the 10 nights can somehow cost ten times as much as an email in the first 20 days of Ramadan. 

Again, from LG’s marketing PDF:

Unfortunately, as was demonstrated in my articles about Islamic Relief and my recent article on domestic overhead for international Muslim nonprofits, some nonprofits don’t care what they spend on marketing, even if they are spending donated zakat. So if a fundraising solicitor like Launchgood tells you they can turn your $50,000 (donated by others for charity) into $100,000 or maybe $200,000, they may not care about the ethics of doing this. Nonprofits are willing to spend aggressively (including zakat) to get in front of Muslims. You as a donor just want to help poor people. Participating in this game at best will limit the value of your donation. At worst, because of LG’s obviously lax to nonexistent vetting (they endorse nothing), all your money could go to a scam.  

Speaking of Zakat

LG has an “add-on” marketing package for the zakat landing page. It looks like zakat-eligible organizations need to “add-on” a fee to be featured on their zakat page. 

This appears to violate LG’s stated “zakat-policy”- that LG does not collect zakat for itself. If they are charging an organization for collecting zakat, that is precisely what they are doing.  While much has changed on the zakat front last year, when I wrote about how useless LG’s “zakat-verified” program was, the zakat-profiteering at this business makes it a horrible place to donate your zakat.  

Sh. Yaser Birjas, who is one of the endorsers of Launchgood’s zakat policy, told me he was not aware of the Lauchgood marketing program and had no visibility into it, even though a large percentage of the zakat on the platform can seep into LG’s bottom line. LG never bothered to ask if this is halal, and if so, how?  This seems like an important question.

There are actually laws about this stuff 

The ethics of fundraisers and nonprofits has long been a concern to state legislatures and the federal government. Donors usually don’t want their “donations” to the poor actually lining the pockets of potentially lecherous charity solicitors. 

In Michigan, where LG is based, charitable solicitors are governed by the Charitable Organizations and Solicitations Act. Charitable solicitors- and it is clear that is what LG is- need to register and report to the state and follow a set of rules. From my own search, it appears LG has not registered.  The Muslim community needs more transparency on charitable solicitors and professional fundraisers. LG appears to be the biggest one operating in the Muslim community, proudly bragging about the 392 million dollars (and counting) “raised” so far.

Advertising Disclosures

One thing you may have noticed when I shared a picture of the Bohd e Shams advertisement is that nowhere on the platform are Muslim donors ever told they are clicking on an advertisement.  You also know that when you go to Google or Amazon there are many advertisements because those companies tell you if the thing you are looking at is an ad or sponsorship.  When a Muslim charity advertises on Google you will know because the platform will tell you.  This is not true on LG.  The company is spamming Muslims with paid advertisements and Muslims have no idea.  Donors are told they are going to a website that works off their tips.  If you go to LG, you have no way of knowing what is an advertisement and what is not.

The reason why other companies disclose advertisements is not doing may violate the Federal Trade Commission Act as well as a variety of state laws regarding unfair business practices. Not following these laws could and should subject a business to trouble.   The Federal Trade Commission has a helpful booklet describing how digital advertisers need to disclose things. 

It can be unfair and deceptive to advertise to people who don’t know they are being advertised to.  It is also wrong to tell donors they make money only off of tips when they are actually paid through what amounts to commission-based advertising solicitations.  It may also be unfair to organizations that use the platform in good faith only to realize they will be drowned out by ad spam unless they pony up serious money to LG to have a meaningful chance of raising money there.  

What Should Muslim Donors Do?

You should closely evaluate the charities that you donate to, or join with friends and family to vet charities carefully before donating to them. There are always people in local communities who do good work, just like there are plenty of fly-by-nights and hucksters who seem to have easy access to the Muslim community. If you want to give internationally, do more research than just looking at bullet points and stock photos. Never donate your money based on emotion alone. Ramadan in particular is an emotional time and Muslims appear to be more vulnerable to manipulation by charitable organizations, legitimate or otherwise, than they may be at other times. This is a time for generosity, not naivete.

If you give emotionally, you will be vulnerable to a rotating gallery of iffy organizations with slick stock photography who paid top dollar for limited slots to be in front of you, and a huge part of your donation will go to LG, the other part may go to a low-quality “charity” that may not actually do much of anything charitable.  

We are better off without Launchgood 

Launchgood may well add “value” to nonprofits or scammers who want to get in front of donors during Ramadan, but they don’t do much for people who are meant to benefit from charitable contributions, they mostly just take.

On balance, Launchgood is a parasitic charity profiteer that makes large sums of money by manipulating donors and taking advantage of their charitable intent while not vetting charities or disclosing to donors how it profits from these transactions.  It’s a social debit to the Muslim community and we would be better off without it.  Muslim donors would be better served “discovering” charitable giving opportunities at places that are not slinging advertising spam.  

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