We're delighted to be able to offer the Bmycharity online sponsorship and fundraising service to UK charities for free. We're aiming to help charities save even more money and we hope that other providers will follow our example and eliminate commission charging. We hope you'll join with us in bringing about this change: online fundraising is much more efficient than paper-based fundraising so more of the money gets to charitable service provision. Now seems a good time to look back at the evolution of our market and to consider the future - how we can add even more to the bottom lines of charities. Over £100 million of donations are still lost each year through missed Gift Aid, poor or non-existent data capture and labour-intensive administration and we want to help change that.
Keep the change - the end of commission chargingIt's now nearly 9 years since we launched Bmycharity as a sponsorship service for Whizz-Kidz. Back then the internet bubble had just burst, I had just hung up my boots after 5 years as a Royal Marine and was adjusting to life in London and Matt was a computer consultant with a sideline in filming underwater wildlife documentaries. We developed the service in our spare time and when it was ready, we offered it first to Whizz-Kidz and then to a range of other charities and we charged 4% on donations (with WorldPay charging an additional 2.5%). We did this because many charities didn't want to risk investing in case online fundraising didn't take off, and it meant that the risk stayed with us rather than charities. Around two weeks before we launched, Justgiving went live, charging 5% commission on all donations, plus bank fees.
A commission-based charging model was appropriate back then because it protected charities from the risk that online fundraising would not work. Now, that risk has passed - online fundraising is firmly established as a key ingredient of the fundraising mix and we believe it's time that the pricing model evolved to reflect this. We've always argued that online fundraising is good because the commission charges are lower than bank charges and other costs that they eliminate - but we know it feels wrong to many people that a third party is taking a cut out of each donation. We don't want this to reduce people's willingness to donate and fundraise online.
They need it more than we doSo we've changed our business model so that no part - not even a penny - of each donation stays with us. When we consider how each penny can make much more difference in the provision of fresh water following a disaster than it can in funding our office costs for example, the moral case for finding an alternative business model is compelling!
Building relationships between charities and the private sectorOur offices costs do need to be covered though, so we've found ways to generate income that don't require us to take a cut out of each donation. Here are the ways we make Bmycharity a sustainable business without charging commission:
- Donors are also consumers, and we've invited a selection of suitable corporate partners to advertise to Bmycharity visitors, paying us commission for everyone who signs up. It's in our interest only to choose suitable partners since if visitors aren't impressed they won't click, and we don't earn any revenue.
- We also welcome corporate partners who wish to demonstrate their support for fundraising in the UK by sponsoring areas of the site.
- Where individual charities request specialist support - for example with consulting and technical development, we charge them on a project basis. Our standard free service includes detailed reporting and analytical tools for charities.
- We work with a network of businesses that offer tools and services that are useful to charities and compliment the Bmycharity platform. Where appropriate, we invite these businesses to provide their services through Bmycharity and share their revenues with us.
- Finally, we keep the cost down! We minimise the cost of running Bmycharity and work with very efficient suppliers and partners.
Why now?We've always set out to provide healthy competition in the online fundraising market. We've raised £25 million so far and over the last year (in spite of the recession) we've increased the amount raised by nearly 40% on the previous year. We could stick with the traditional approach and continue to grow steadily - but we see an opportunity to drive a change that goes far beyond the reach of Bmycharity.
Just as internet usage blossomed in the UK with the widespread arrival of broadband, replacing pay-per-minute dial-up connections, we think the time has come for online fundraising to blossom and fulfil its rightful place as the most popular and efficient way to support good causes - free from the visceral sense that someone is taking a cut away from a good cause.
For years the market has been dominated by JustGiving, and we've noticed that whenever a new entrant (such as Everyclick in 2008) appears it helps us by encouraging charities to look again at what online fundraising can do - and many choose to sign up with Bmycharity. With the recent launch of Virgin Money Giving, we've benefitted in a different way, since Virgin have emboldened other corporate brands to consider ways that they too can contribute to the third sector. Bmycharity's affiliate and sponsorship options offer them a very cost-effective way to do so.
But setting fundraising free isn't something we want to monopolise. We're encouraging every provider to seek ways to provide these services for free. After all, the value that they deliver to thousands of good causes is too great to allow donors to be offput by a commercial interest.
A creative future beyond commission charges - filling in the fundraising spectrumSponsorship fundraising is one of the big success stories of the last decade, but the future is even more exciting. We're working with a growing network of creative social entrepreneurs and charities to make it easy for charities and their supporters to broaden the impact of their fundraising activity. Since thousands of people encounter charities only through fundraising pages, we want to make sure that there are ways that they can engage with causes beyond reaching for a credit card. Recruiting new fundraisers, volunteers, campaigners and even employees, offering ways to contribute by changing shopping and web-searching behaviour, even providing services to beneficiaries such as video clips on cancer self-checking - all of these are possible through fundraising pages.
Bmycharity's vision for the future is to provide the free, secure, helpful platform on which all of these charitable benefits can be delivered.
Ben Brabyn 1 October 2009
