Why shouldn't JustGiving make a profit, asks ex-director

Fundraising | Tania Mason | 14 Oct 2009

JustGiving’s former client services director has defended the profits and salaries unveiled in the company’s latest accounts and queried why it is less acceptable for it to make decent profits than other companies that supply services to charities.

Tom Mansel-Pleydell, who last year moved to a role as social business developer at social business marketplace ClearlySo, described JustGiving’s £1.39m profits as “pretty impressive” and said he had seen first-hand the “slog” of the people involved to get to this point over the last eight or so years.

Professional Fundraising revealed the extent of JustGiving’s profitability last week, and on the weekend the Sunday Times reported that Help for Heroes had advised its donors not to use JustGiving but to opt instead for bmycharity, which recently announced it would stop charging charities commission on donations. However, yesterday Help for Heroes denied it had said this, though the journalist stood by his story.

In the wake of the row, Mansel-Pleydell (pictured) hit back at the challenges to “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?” he said in response to PF’s story.

“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 or not, are charities’ beneficiaries and supporters not benefiting regardless?”

He pointed out that the JustGiving investors had not yet been paid a dividend, had revolutionised online fundraising, and raised hundreds of millions of pounds for charities that would not otherwise have been raised.

“Should that investment be decried as ‘unacceptable’?,” Mansel-Pleydell asked. “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.”

The issue dovetails neatly with the primary theme of Charity Finance Live next Monday, where the blurring of the boundaries between non-profit and for-profit organisations will be examined in a head-to-head debate between provocative US fundraiser Dan Pallotta and ex-Shelter chief Adam Sampson.

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Andrew Pring
15 Oct 2009

JustGiving is not just another service to charities like providing electricity or photocopier paper.

The real customers of JustGiving are those making donations.

If Tom Mansel-Pleydell wants to put cash in his pocket he should ask people directly to contribute to his bank balance and not rifle funds people believe they are giving to charity.

That is not good business practice, it is stealing.

Where does he say that your contribution includes a rake off to support his Porsche?

[Reply]

John Smith
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15 Oct 2009

Seems to me that Andrew Pring's big gripe stems from the whopping chip on his shoulder.

The salaries of managers in start-up online businesses are very far from supporting Porsche ownership (maybe a Porsche keyring for their bicycle lock), so what is it that entitles him to conclude that Tom drives a Porsche just because he has a posh name?

If Andrew was called Cholmondeley-Pring it would be equally unjust for people to jump to the conclusion that he is a total prat , even though they might be right.

Let's face it, those customers of Montagu-Douglas-Pring's would have found it impossible to raise tens of millions of pounds for deserving charities over the last few years had JustGiving not existed.

And the vast majority of them will have done so knowing perfectly well that clouds are not made of candy floss and JustGiving is not itself a charity.

Experience tells us that Virgin never does anything for free. It also tells us that if you pay peanuts you generally get monkeys. Time will no doubt prove JustGiving to be a Porsche among online donation portals (or whatever they are called), and if its client-charities prefer to go for a Skoda Fabia or Ford Fiesta then that's their lookout.

[Reply]

Tom
ClearlySo
15 Oct 2009

Andrew (and Garry & John),

Thanks for taking the time to comment on what is clearly an important and passionate topic. Andrew I agree with you that the real customers of Justgiving are those making donations; every sustainable business – and charity - must ask where its money will come from. But thereafter our paths must diverge.

You have said Justgiving is different to other charity service providers but you have not said how they differ. Also, your comment has not addressed the role of charities in the equation; I would ask you to consider, before passing sentence, the two (positive) comments made prior to yours, both from fundraisers in charities, which seem significant to me.

As for ‘stealing’, that is a serious accusation, but then I described my train fare to work this morning in exactly the same terms (the Porsche being up on bricks at present). Justgiving do not ‘rifle’ funds; they explain clearly how a donation is affected by their transaction fee. If you are unhappy with how this information is displayed, I would urge you to contact their helpdesk with suggestions for a workable alternative.

Porsches aside, let me ask you a question: what do you think the value – perceived or actual - is to the rest of, let’s say, the Virgin Group of Companies from the non-profit trading activities of its recently launched fundraising service? They all begin with the magic letter ‘V’, unless I’m mistaken. What associations do you think people – customers - might make between Virgin’s non-profit service and the rest of its (for profit) trading companies? In your view can those perceptions, those associations and the value they create for the brand, be entirely divorced from the Group’s overall profit?

If the answer is no, then how much of a Porsche does that ‘rake off’ to finance? A chassis? A bumper? A wheel nut?

If the answer is yes, let’s have lunch in La-La Land together sometime soon. It’s on me.

Let Justgiving lose clients to Bmycharity and Virgin, but let it be because those clients – charities, fundraisers and donors alike – perceive the value of the service they are buying to be better. Let it not be because Justgiving has been unafraid to say, from day one of its existence, that it wants to build a profitable business by serving the charity sector.

[Reply]

Garry Wilkinson
Fundraising & Marketing Manager
Kirkwood Hospice
14 Oct 2009

Tom Mansel-Pleydell is of course absolutely correct that JustGiving are entitled to make a profit - in the same way that charities are entitled to choose who they will work with when encouraging on-line donations.

Given the pressure charities are under to raise the funds they need to survive, I suspect JustGiving will find a considerable number of their client-charities moving to BeMyCharity or Virgin Money Giving during the next 12 months.

Personally, I am not in any way dissatisfied with the service JustGiving provides. However, I suspect that just like many other charities it will be a simple case of economics; a move away from an expensive provider to a cheaper one, ensuring more funds for hospice care at Kirkwood.

[Reply]

John Frame
Trustee
The Sportsman's Charity
14 Oct 2009

My charity has been around for 27 years and this year we initiated a new event The Hearts and Heroes Challenge (http://www.heartsandheroes.co.uk/) with 2 other charities who will run the event this year. We cleared some £145,000 most of which came in via Justgiving. The charges compared to the grief and cost of the work which would be involved in handling and processing paper donations are miniscule.

But apart from the charges, here we have a system that works and collects FAR more money than wandering about with piles of ever-deteriorating sheets of illegible paper!

Justgiving is worth its weight in gold! I agree with Tom Mansel-Pleydell wholeheartedly.

Kind regards

John Frame

[Reply]

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