Digital giving platforms ‘terrifically inefficient’ means of fundraising

01 Dec 2017 News

The vice chair of UK Community Foundations has said he is worried about the “proliferation” of digital crowdfunding, because he thinks it’s a “terrifically inefficient way of raising” and distributing charitable funds.

Speaking on a plenary panel on the second day of the Directory of Social Change’s Fundraising Fair yesterday, Rob Williamson, chief executive of Community Foundation Tyne & Wear and Northumberland, and vice chair of the umbrella body for local grantmaking organisations, said he was worried about the “proliferation” of crowdfunding appeals.

He said the volume of digital fundraising appeals launched in response to terrorist attacks and disasters such as the Manchester bombing and the Grenfell Tower fire had confused the public and damaged the reputations of the charities involved.

“Personally I worry about the proliferation of crowdfunding platforms because it is a terrifically inefficient way of raising money, along with issues around distribution. Such donations also lack Gift Aid.

“Clearly the proliferation of appeals in response to Grenfell was confusing for the public, courted reputational issues for the charities involved and raised significant concerns about how the money raised should be spent.”

Single coordinating body makes 'logical sense' 

Speaking on a panel alongside former director of fundraising at the British Red Cross, Mark Astarita and Monica Blagescu, director of programmes and accountability at the Disasters Emergency Committee, Williamson said the creation of a “single fund” to respond to disasters “logically makes sense”. However, he argued “when did logic ever apply to the public’s response to a disaster or emergency?”

He also said that the creation of a single body to coordinate and distribute funds, based perhaps on a domestic DEC model, would not address some of the concerns raised about “the proliferation of appeals” such as slow distribution, poor accountability and general confusion.

“I’m not sure a coordinating body would stop that, in fact I’m sure it wouldn’t.”

DEC ‘doesn’t coordinate member charities operations abroad’

As a staff member of the DEC, Monica Blagescu said while there were issues with the way the funds were distributed from the appeals to those they were raised for in the wake of issues such as Grenfell, she did not believe the creation of a domestic DEC model was the answer.

Blagescu said that the DEC itself doesn’t necessarily coordinate its member’s response to disasters overseas. She said that such coordination was usually handled on the ground by either “the local authority” or the United Nations Office for Coordination of Humanitarian Assistance.

“Is there a need in the UK for better coordination of donations? The answer to that question is yes. Is there a need in the UK for charities to better coordinate their response? The answer to that question is also yes. However, a DEC-like arrangement I would argue is not the solution.”

Also speaking on the panel, Mark Astarita said that the work he and his team did between the terrorist attack in Manchester which took place on 22 May 2017 and the fire at Grenfell Tower which began on 14 June 2017 was “the hardest thing ever to do” but raised over £30m for those affected. Of that money, Astarita said more than £4m was raised through digital giving platforms.

Astarita said the events of the late spring and early summer of this year showed that “raising money isn’t the issue” but distributing it fairly and quickly to those who need it “is very difficult to do”.

Williamson suggested that, instead of a domestic DEC, the sector might look more to “corroboration, partnership and shared protocols” in the face of a future domestic disaster or terrorist attack. 

The issue around the accountability and transparency of certain digital giving platforms is becoming an issue in government, with a Westminster Hall debate tackling the topic on Wednesday.

Tory MP Mary Robinson criticised certain platforms for charging fees and called on Tracey Crouch, minister for civil society, to give the Fundraising Regulator more scope to deal with platforms not adhering to the Code of Fundraising Practice. 

In response Crouch said: "We think that effective self-regulation rather than government intervention can deliver on the public’s expectations”

 

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