Justgiving doubles profits to nearly £1.4m 2

Fundraising | Tania Mason | 9 Oct 2009

Justgiving more than doubled its pre-tax profits to £1.39m in 2008, and its chief executive Zarine Kharas earned a basic salary of £141,667 plus £32,327 from an employee profit-share scheme.

Although its four directors - chief executive Zarine Kharas, managing director Anne-Marie Huby, John Huysmans and Bela Hatvany – still did not recommend paying a dividend, they collected salaries totalling £428,286, new accounts show.

Total wages and salaries for the company, registered as Giving Ltd, was £3.46m, an average of £68,000 per employee. Staff costs grew by £1.3m to £3.9m even though employee numbers only increased by five to 57.

Kharas, the highest-paid director, had a pay rise of 23.6 per cent in 2008, up from £114,584 in 2007.

Until last year the major shareholder in Giving Ltd was MF Ltd, a dormant company that was registered in Bermuda. MF Ltd held 68 per cent of all Giving Ltd shares. But in 2008 Bela Hatvany, a technology entrepreneur and philanthropist who is Giving Ltd’s key investor, transferred his shares from MF Ltd to Pollcast ApS, his investment company incorporated in Denmark.

During 2008, Justgiving raised £150m for 4,742 charities, up from £103m for 3,363 charities in 2007.

Its income was up 53 per cent to £9.17m from £5.9m in 2007, and comprised £7.3m from UK operations and £1.8m from the US arm, Firstgiving, which raised $33m for 3,458 charities, up from $23m for 2,088 charities in 2007. Profits totalled £1.39m, more than double the £640,708 recorded in 2007.

According to Huby, the directors did not feel the time had come yet to reward investors via dividends. “Our investors share our vision for long-term reinvestment in the business, which to date has been more than £25m,” she said.

Asked whether the directors felt it acceptable to pay themselves salaries exceeding £100,000 from money derived from charitable donations, Huby said the company benchmarks itself against similar-sized companies and charities. She added that when Justgiving first launched, “we paid well below market value – and sometimes did not pay ourselves at all”.

Giving Ltd has no intention of converting to a Community Interest Company, which would ‘lock’ the assets for community use and confirm its social enterprise credibility. Huby said: “In our view, the legal constitution of an organisation is irrelevant – what matters is the value that it delivers and how it behaves. By generating profits and ploughing them back into the business we can keep innovating and generating more value for charities and their supporters.”

All employees have taken up share options in the business.

Directory: JustGiving
Who's Who: Tania Mason

Place a comment

Tom
ClearlySo
12 Oct 2009

Some pretty impressive results here. Justgiving have slogged really hard to build this business through some very tough times; and I should know – I was there from pretty much the beginning until last year. I’m interested in discussing this concept of ‘the acceptability of profiting from donations’. Are Justgiving any different to telecoms, mail, water, office cleaning, lawyers, banks, taxis, consultancies, payroll, marketing, advertising, insurance companies, ICT providers et al, all of which provide a service to charities to help them operate, grow and do the great things they do? Charities pay for these services either wholly or in part from donations (though obviously this varies greatly from one charity to another), so if that service represents good value, whether it is associated ‘directly’ with the donation/gift aid or not, are charities' beneficiaries and supporters not benefitting regardless?

As for the capital invested in the company, their investors have yet to see a dividend after almost 10 years, a ‘patient capital’ approach, it would seem. And when investors do see a dividend, it will come from a company that has helped revolutionize the concept of donating (at considerable risk to those investors), raising hundreds of millions of desperately needed pounds for some amazing charities. Should that investment be decried as ‘unacceptable’?

Contrast this with competitors – some with extremely deep pockets – which have waited in the wings to see which way the wind blew and, now confident that the online fundraising model works, are flaunting not-for-profit credentials as if profit were some stand-or-fall lynchpin: easy to say when your startup capital comes from the Mothership…

Justgiving is successful because it is good at what it does; if it ceases to be good, it will cease to exist. Simple, really. If its service helps to raise more funds for charity by adopting a for-profit model over a not-for-profit model, might one argue that it perhaps has not merely a right, but a responsibility to do so?

[Reply]

Will
22 May 2012
Response to [Tom]

Yes, Justgiving is completely different from other suppliers to charities. Justgiving is not a supplier to charities it is a B2C proposition for individual fundraisers. It would be absolutely fine if its 5% charge was writ large and understood by every fundraiser before they signed up. However, it's not well understood, it's as well hidden as it needs to be. You want proof? Ask ANYONE who has used this site and they will tell you the same thing: that they are SHOCKED that 5% of their funds are going to a highly profitable commercial business whose directors pocket say £400k a year and finds its way to pay £6M in other salaries and make a very decent profit over a long period of time. Its net worth has built up to over £5.5M.

Meantime, there are alternatives that are covering transaction costs and not much more it would appear.

Make sure everyone knows how much you plan to charge before you charge them - that's a reasonable rule in treating customers fairly in any industry, let alone charity.

[Reply]

Comments

[Cancel] | Reply to:

Name *

Email *

Organisation

Job Title

Comments *

Verification *

* Please read our Community Standards

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

Robust but respectful debate
Strongly held opinions
Intelligent relevant discussion
The sharing of relevant experiences
New participants

We will not publish:

Rude, threatening, offensive, obscene or abusive language, or links to such material
Links to commercial organisations or spam postings. The comments board is not an advertising platform
The posting of contact details for yourself or others
Comments intended for malicious purpose or mindless abuse
Comments purporting to be from another person or organisation under false pretences
Gratuitous criticism, commentary or self-promotion
Any material which breaches copyright or privacy laws, or could be considered libellous
The use of the comments board for the pursuit or extension of personal disputes

Be aware:

Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
Comments left by others may not be accurate, do not rely on them as fact
You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

Enjoy the opportunity to express your opinion and respect the right of others to express theirs
Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.