Why Companies in the Charity Sector Aren’t Evil

“Hang on, you’re making a profit from charitable donations? Isn’t that evil?” asked Max, a razor-sharp guy with fantastic stubble and a twinkle in his eye.

I’ve been asked variations on that question many times since I first joined Justgiving back in 2003, and on most occasions have failed to answer it eloquently.

I always end up stumbling around long winded pre-amble, as I do, and people lose interest, so here’s my crystalised answer.

You don’t yet understand what a charity is

It’s inflammatory, but also accurate. If you think making a profit in the charitable sector is evil, then you literally do not understand what a charity is. Yet. There’s no shame in it, lots of people don’t, even in the industry.

I’m not usually this blunt, but the explanation requires people actually pay attention, and accusations of “evil” warrant a gentle put-down.

So, what is a charity?

A charity is an arbitrary line, drawn
around a collection of processes.

That line, which defines what organisational processes a charity contains (e.g. supply chain, field work, campaign management, helpdesk) has been established by hundreds, arguably thousands, of years of history, but is otherwise pretty arbitrary.

I say it’s arbitrary, because it doesn’t matter in any ethical sense whether Christian Aid pays an in-house accountancy team or gets an outside agency to do it. The only reason it matters is efficiency, cost-effectiveness, thrift.

You can debate the most cost-effective solution if you like, but I think history has demonstrated that it’s typically a for-profit company in a healthy competitive market, because those players are most incentivised to innovate and optimise. So the real question is, which responsibilities does it make sense to farm out to companies?

What Justgiving did was to take one organisational process from inside that arbitrary line (online fundraising), and move it outside… turning it into a service, and allowing economies of scale.

Think about that for a second.

An entire generation of larger charities no longer had to pay for their own in-house development team in order to fundraise online. An entire generation of smaller charities gained access to online fundraising for the first time.

The service kept improving. Donors had a better experience. Fundraisers raised more money. Charities had lower costs.

That’s the opposite of evil in my opinion.

The real question for me is; what else is inside that arbitrary line that doesn’t need to be? In what other ways is the charitable sector inefficient? More on that next time.