Sunday, October 11, 2009

Just Giving Deserves its Profits

A few weeks ago I wrote a column in praise of the excellent charity Help for Heroes (H4H). Today I am going to disagree wholeheartedly with their public criticism of the excellent Just Giving, a private company which has enabled over half a billion pounds for charity.

What is Just Giving's crime? It charges 5% commission on donations. It is privately owned. Run for a modest profit. Pays its CEO and staff very well indeed. Simple as that.

This, we are told, is wrong. Instead, H4H is advising donors to use another site, one that doesn't make profits. A site that has been around now for a long time but, strangely, hasn't raised a great deal of money. And which, despite its relaunch, will take a very long time to scale the heights acheived by Just Giving.

It is on issus like this that I despair about our elements within our sector. Surely what matters about Just Giving isn't that it is profitable but that it has transformed giving in this country. Everyone knows someone who has used it. It is a brilliant innovation. Gone are the days of sponsorship forms, running after people for money and maybe getting round to claiming Gift Aid. Just Giving takes care of all of that. Charities should be falling all over these people in gratitude, not criticising them!

The oppobrium comes, I think, from a deep naivete about the way things like Just Giving happen in the first place. The founders had to develop new technology. They had then to get take-up to high enough levels to cover massive early outlays. And, on a personal level, they had to put their reputations and, probably, personal lives on the line for several years. Just to stay alive.

Now they are successful, yes, it all looks very good for them - the two owners have 10% each of the company. But it was not always thus. Not that they were motivated first by profit - both had a bigger goal: to transform UK fundraising. It was just that they figured the best way to do this was through a profit-pursuing company.

So come on, if you are one of those people nodding with agreement at the criticisms of Just Giving, ask yourself this. Would you prefer a return to the dark-age we were in before their appearance? Would you be happy for that half a billion to have been, at best, a hundred million - with next to no Gift Aid collected?

Thought not. So let's judge achievements, not mechanisms. Ends not means. And recognise a brilliant success story for what it is.


Rob Fountain said...

Is the issue here simply that Just Giving could be more transparent about their cut? I've used them as both a sponsor and someone seeking donations and think their service is great. I didn't, though, know about them taking a slice of the donations until I read your blog. Having done so, I completely agree with your endorsement and would have no problem using them again. I think most rational souls would recognise the need for outlay to be recouped, energies to be rewarded. I would guess, however, that people would be happier if there was a clearer acknowledgement by Just Giving of this business foundation. A whisper about top-slicing will make givers nervous, so they (not you) should shout about their success and how they achieve it. (Of course they may do this and it may be that I never looked closely enough before). Good post.

rharris said...

I wasnt aware of their cut either; and i dont care about it, they deserve it. I am actually super impressed by the entrepeunerial skill that the founders have generated - i wish i had thought of it.
I could argue that the level of finance they have generated into the 3rd sector will have a greater impact than some of the charities delivering services in the sector - the money they generate is not "ring fenced" and can be used for creative endevour.
Well done Just Giving!

Craig Dearden-Phillips said...

Good to have the two Robs agreeing with me on the whole. More transparency, Rob F? I am not sure how relevant the private status is to people using the site. Were it a charity site charging 5% from the Gift Aid, I don't think people would lift an eyelid. But I still know what you mean. I thought it was a charity site too. Not that its private ownership would ever stop me using it.

Rob Greenland said...

I'm not sure what the collective noun for a group of Robs on a blog is, but here's another comment from a Rob. I agree pretty much with what's been said already. I also agree Just Giving could be a bit more transparent - but it's no doubt a sound business decision not to be too up front about the money they're making.

They're in a market where most of their customers will have a pretty underdeveloped understanding of the mechanics of giving. Witness how people are often up in arms when they hear that some of their donations to charities get spent on administration - as if the whole sector runs on fresh air and volunteers.

Yet it's still a shame that they can't take a bit of a lead and just be up front with people.

As you say, CAF is good for what it does (I use it for regular saving so I can donate quickly when I want to - but I'm far from normal) but its impact is minimal compared to the mass market success of Just Giving. Good on them for bringing some entrepeneurialism to this field.

Anonymous said...

It is wrong for people to make a profit through the misfortune of others. A fair wage is a whole lot different to profit! the fact is because this is a private company they do not have declare where the profit goes or anything. if it were a listed charity or even a public listed company it would require transparency. for all we know they could be investing in weapons companies to ensure the misery (which keeps them in profit) just keeps on coming.

Ross Duncan said...

Its clear none of you run charities. Not only do they charge £18 a month for all charities as an admin charge, no matter how small the charity, the service they provide is poor. Their woeful reporting, their inability to make system changes without chocking something up and the fact that they're clearly making a fortune at the expense of small charities like our is abysmal. Yes they provide a service and yes it's still unfortunately somewhat preferred than others but I see that s having to change soon to stop this exploitation.