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 charging
It'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 do
So 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 sector
Our 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:
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 spectrum
Keep the change - the end of commission charging
It'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 do
So 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 sector
Our 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 spectrum
Sponsorship 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
Great news, congratulations on leading the way.
This model makes a huge amount of sense to the sector, allowing charities to pay for the services and support they need, but not charging donors for making a donation.
Let’s hope the JustGiving and Virgin will respond in kind - boosting charity income considerably by dropping their commission charges.
Posted by: Sue Fidler | 01/10/2009 at 09:36 AM
Congratulations Ben. It's good to see bold moves in the online fundraising sector, especially ones that clearly have a direct financial benefit to the charities that use your service.
We've featured this of course on UK Fundraising at:
http://www.fundraising.co.uk/news/2009/10/01/bmycharity-introduces-0-commission-online-fundraising
Your comments above remind me of other big changes in various sectors, such as the arrival of Freeserve in the Internet Service Provider market and low-cost airlines like EasyJet. I imagine you'd be pretty happy if you had that kind of effect in the charity sector!
I wonder if your move will have other repercussions? The mobile phone network companies and their charges on donations via SMS springs to mind.
And there's the rise of 'free', particularly online, as described by Chris Anderson in '"Free: The Future of a Radical Price: The Economics of Abundance and Why Zero Pricing Is Changing the Face of Business" at
http://www.amazon.co.uk/Free-Economics-Abundance-Changing-Business/dp/1905211473/219
While that is having an impact on industries such as newspapers and publishing, I didn't think we'd see an example in the fundraising sector yet. Nice to be proven wrong.
Posted by: twitter.com/howardlake | 01/10/2009 at 09:57 AM
Excellent move, Ben.
Welcome to the world of free online services to charities :-)
Greater transparency within the marketplace in terms of how you make your money is important too - so, again, well done for clearly stating your model.
With clarity and transparency comes confidence - let's hope that charities recognise that there actually can be a "free lunch".
Posted by: Charles Lovibond | 01/10/2009 at 11:14 AM
Congratulations, Ben, on a bold move.
Posted by: Seb Bacon | 01/10/2009 at 11:31 AM
Wow...congratulations on this, fantastic, brave (but obviously well thought out) move. Wish you ever success?
Posted by: Conor | 01/10/2009 at 11:48 AM
Several months ago I wrote a blog trying to simplify the choice charities faced regarding which online fundraising services to use.
http://bit.ly/17g837
I concluded then that all the major services add value, depending on what the charity is trying to achieve. What I couldn't see was a good reason why charities wouldn't use more than just the largest player, JustGiving.
Virgin Money Giving's recent launch moved the game along and introduced a healthy dose of price competition which gave charities even more reason to register with multiple services.
And as of today, the guys at Bmycharity have made the next move in what has been a fast-changing market space throughout 2009. By removing all of their charges, Bmycharity is now offering a free service to charities ie; more of the donations go towards the cause.
Undoubtedly there will be a few sharp intakes of breath as people acknowledge that this will mean some sponsorship and advertising will appear on the Bmycharity site. But, if it is done sensitively and sensibly as suggested above, WHO CARES?
I for one can put up with a banner advert if it means more of my donation goes to my charity of choice.
So, on reflection I stand by my original conclusion with even more conviction. As a charity fundraiser why wouldn't I use as many of these services as my supporters want to? Why wouldn't I give myself the chance of exposure to as large an audience as possible?
And please don't tell me it's because we don't have time! How can you not have time to take advantage of a free service which supports your fundraising targets?
Congratulations to Bmycharity on a brave move which I hope moves the game along positively for both the online donation providers and their charity customers.
Posted by: Kevin Baughen | 01/10/2009 at 12:49 PM
Fantastic news, Ben. Let me heartily congratulate you for taking the lead. Bmycharity to Freemycharity - it feels so right! It'll certainly shake up the sector and if others follow your initiative, the net result will literally mean millions more for charity.
Cleversquirrel is out of the same stable. A free-to-use service for charities, fundraisers and donors - unearthing the hidden millions for charity. The perfect addition for anyone having just made a donation - to add extra, at no extra cost. http://www.cleversquirrel.com/bmc
It's great to know we share the same vision. Complimentary services working together for the ultimate benefit of good causes. Maximising the amount given to charity, at the lowest possible cost. And you can't get much lower than zero!
Posted by: Brian Bennis | 01/10/2009 at 05:37 PM
Fantastic news - as a Trustee of a small charity run totally by volunteers every penny really does count. Thank you for supporting all of us who are trying to help others. I'm now going to try and canvass some organisations to advertise on your website!
Posted by: Sean Devereux Children's Fund | 01/10/2009 at 08:53 PM
And now the London Evening Standard is going free, after 180 years as a paid-for title:
http://www.guardian.co.uk/media/2009/oct/02/london-evening-standard-free
You're part of a significant, brave trend, Ben.
Posted by: twitter.com/howardlake | 02/10/2009 at 10:39 AM
What an amazing response! I thought you put forward a well written case for removing the charges and replacing with advertising.
Posted by: Marc Simpson | 04/10/2009 at 09:54 AM
This is a really exciting move forward for online giving, I just hope you guys can make the free business model work...it won't be without its challenges.
We now have BmyCharity offering a free service, Virgin Money Giving operating at 'cost' and Just Giving providing undoubtedly the most popular service all be it with a fee.
I wonder if there's room for all three as they currently operate or will we see everyone shift towards the no-fee model?
PS...Ben has also opened up the debate on this over on Third Sector Forums - http://www.thirdsectorforums.co.uk/showthread.php?p=3159#post3159
Posted by: Ross McCulloch | 07/10/2009 at 11:12 AM