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Setting up a social enterprise

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How four fathers set up a fundraising site to benefit charities and schools, and what they learned about the process of giving.

Background

When we set up TheGivingMachine, the four of us knew we were starting a journey into the unknown third sector. We knew that we wanted to build a company to give money away and we had an idea of how we would initially do it. But we didn't know that the journey would teach us about the relationship between supporters and the charities/schools they support and the different attitudes they have.

The issues we faced

We wanted to build a company that exclusively shared its revenue with the charities and schools that individuals chose. To do this we had a simple idea which seemed almost to be too good to be true.

The actions we took

The idea was to build a website which uses online shopping to generate charitable funds. Shoppers choose charities and schools to support on TheGivingMachine and then click through to their favourite online shopping sites who are part of the scheme. A percentage of the every sale is donated by the retailer, on behalf of the shopper, to their chosen charities and schools. Donations cost the shopper nothing personally and the online retailer is happy to pay them.

TheGivingMachine makes sure that the shopper's chosen charities and schools receive their donations. The beneficiary starts to get donation payments without having to do much other than letting supporters know about the scheme. It’s obviously much more complex in the background but essentially, that’s how it works.

Positive outcomes

Our community of givers are really passionate about supporting the schools and charities that mean something to them. There are many examples; typical ones relate to givers who are concerned if a specific donation is not yet displaying in their giving accounts on TheGivingMachine.

Some of these donations may only be £1 or less but the energy and enthusiasm to ensure that these donations are correctly recorded is representative of how much real people actually care and want to support their personally chosen beneficiaries. These givers are who we really represent and who we built TheGivingMachine for.

We have seen a universal acceptance by givers to the TheGivingMachine concept as it is a relatively small thing to 'ask'.  Online shoppers only have to make a small change in their behaviour to benefit others. Our explosive growth in our number of givers is evidence of that our givers agree with this statement. They really care in a longer term way, about who they want to give to and not just as a one-off response to a specific appeal. 

Lately, the charity sector is starting to show interest in using TheGivingMachine for online fundraising mainly because traditional sources of funding are diminishing and our scheme is low cost and low effort as an alternative source.

Negative outcomes

A local secondary school (where I had relatives attending) seemed a natural beneficiary that we could help. They appeared to be vaguely interested about getting involved and agreed to participate so we put them onto the system. However, they didn't do anything within the school community to tell parents and supporters about using TheGivingMachine. Some of the parents independently started using TheGivingMachine to donate to the school.

When they received their first donation payment, the school was surprised and the headmaster (who was not aware that a colleague had verbally agreed to participate) asked me to remove the school from the site. I said that I was happy to do so but we'd have to tell the now growing giver base that the school no longer wanted donations from them in this way. The headmaster responded that we had better leave things as they were and has gratefully received further donations since.

Lessons learnt

When we started meeting with larger fundraisers, a well-known children's charity reviewed what TheGivingMachine was about and their simple and honest response was “it is more efficient for me to ask all my donors for an extra tenner” than to ask them to donate in a new way.

This was valuable feedback which has been verified many times since. Fundraising in large charities seemed to be more about the efficiency of taking money and not to do with how people actually may want to give it. As time went on we learned more about this focus on the 'efficiency of taking' within charities as they get bigger.

We observed that this is not built on an understanding of the relationship individuals want to have or can afford but on marketing segmentations of large 'datasets' of donors who can be profiled, categorised and targeted for various 'asks' to extract the most amount of cash possible. Lapsed donors caused by too much marketing pressure just become a statistic on a spreadsheet that merely offsets the gains made from those that respond to increased requests.

Initially this seemed disheartening. We had thought that the large charities would embrace what we do as a free source of income, we didn't anticipate that, to some of them at least, it wasn't considered worth their while. In the end this turned out to be a major turning point for us. We started listening more to our other main audience, our givers. Our givers loved what we did and even when we made the odd mistake and dealt with it, we still received positive feedback – we were obviously doing something right.

Our givers convinced us that we were very firmly on the 'giving' side of the relationship and were there to support givers giving to what mattered to them. This meant that even if a charity or school was not on our system, we would allow a giver to donate to them as long as we could verify the credentials of a particular beneficiary.

We called this new initiative 'floodgates' and it has really tapped into our giver community’s energy. At last count, our givers support over 1,500 beneficiaries who have directly registered with us and a further 700 who have not. We write to beneficiaries who have been 'nominated' to let them know that they now have supporters on TheGivingMachine and invite them to join and promote the free scheme if they wish but reassuring them that we will send donations to them regardless. We now think of ourselves as proudly 'giver-centric'.

Find out more

If you would like to know more about TheGivingMachine then please contact richard@thegivingmachine.co.uk  

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Page last edited Apr 13, 2017

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