Virgin Money Giving is celebrating its first birthday after boosting the online giving market by more than £21 million in its first 12 months.

And it is urging charities and fundraisers to fully embrace technology as the best way to maximise money for good causes in the face of the ongoing squeeze on charitable giving.

Online giving cuts administration costs, improves Gift Aid uptake and is more convenient and easier to use for charities and fundraisers, Virgin Money Giving says.

Its own not-for-profit model and 2% fee to cover costs means it was able to channel £1 million more to charities during its first year than if the cash had been donated through other online donation services.

But the biggest boost for charities was in the increased take-up of Gift Aid through online services – a key challenge outlined by a report from leading think tank ResPublica which warned that charities were missing out on Gift Aid on donations of under £5.

More than 82% of donations of less than £5 through Virgin Money Giving were boosted by Gift Aid – ResPublica says 80% of charities fail to chase up Gift Aid on donations of less than £5. Total Gift Aid uptake through Virgin Money Giving is 87% compared with just 40% through other fundraising methods according to the Charities Aid Foundation. As a result of Gift Aid on donations, the £20 million raised on Virgin Money Giving has been boosted to £25 million.

For every £10 donated on Virgin Money Giving £12.47 makes its way to charity assuming Gift Aid donors are UK taxpayers.

Virgin Money Giving has over 2,400 charities registered and 40,000 fundraisers taking part in a range of activities, from the Virgin London Marathon to a team of fundraisers driving a fire engine across the globe.

Jo Barnett, executive director at Virgin Money Giving, said: “Since launch we have helped charities raise £25 million which is a fantastic achievement. With continued uncertainty around the economic situation, charities need to make the most of every single donation.