The not-for-profit service from the Virgin Group says it will increase the money that goes directly to charities, by an additional £5m for every £100m raised.
In 2008, Virgin Money signed a £17m deal for a five-year contract to sponsor the annual London marathon from 2010, replacing Unilever brand Flora, which sponsored the event for 14 years.
The site will only look to cover its costs and will not charge for administering Gift Aid to donations.
Charities are able to create their own promotional pages on the site and send out email alerts to fundraisers to promote events and fundraising.
Virgin Money Giving will also provide charities with detailed reporting facilities and access to fundraiser data to help create better-targeted campaigns.
Virgin founder, Sir Richard Branson says: “Virgin Money Giving is a great example of business working in partnership with the third sector to create new ways of doing things where everyone is better off.”
Any additional earnings Virgin Money Giving makes will be invested back into improving the service it offers charities and reducing the costs further.
Rival online fundraising service Justgiving.com currently has over 8m users worldwide. The Virgin site is not yet open to fundraisers but the public launch will be announced shortly.