ZK awarded the RSA’s Albert Medal

Friday 17th April, 2009

Just noticed the story over on the Justgiving blog that my old boss Zarine Kharas has been awarded the RSA‘s Albert Medal.

Since I’m so fashionably cynical I’m going to blatantly ignore all kings and queens in the list of previous winners. Even still, there are some fairly mammoth shoes to fill amongst the tabulated notables:

Good for you Zarine. What’s next?

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The next step for Third Sector services

Friday 12th December, 2008

My old firm Justgiving has been pushing its way into the nation’s charitable subconscious since 2001.

Every breakthrough company like Justgiving fills a previously empty niche, or cuts open an entirely new market. The hole Justgiving filled with its hero product, sponsorship pages, was previously occupied by paper-based sponsorship forms… something that was dragging down the process of fundraising rather than lifting it up. Justgiving’s sponsorship product smashed the previous contender on speed, ease, tax efficiency, fun, and sheer style.

Nicely done.

They can’t sit on that model forever though. Any product can be copied, and Justgiving’s product has been, many times. Over time it will probably become a commodity service, and companies will compete on features, ease of use, fees, and event tie-ins. Big players muscle in. Margins shrink.

Looking at it from the perspective of the charitable sector, this new type of service has drastically improved that aspect of their fundraising work. Fundraisers are happier, charities get more data, more money is raised.

Again, nicely done. What now?

Thinking in cold, hard, cynical currency, Justgiving sells warm fuzzy feelings. I know that may sound bizarre but a company in the charitable sector is a bizarre thing. I think the only way to rationalise it is to treat the fuzzies people get from charitable transactions as being something of value. Those feelings come from two sources; the fuzzies from giving money to a ‘good cause’, and the fuzzies from supporting a friend. Then there’s the less fuzzy commodity that Justgiving sells, which is the avoidance of the guilt you might feel when not sponsoring yet another friend who’s running a 10k (be honest, we’ve all been there).

Justgiving currently supports the second and third aspects very well already, as does the rest of the industry, but what about where the money is going? Surely we should be able to see more of what’s happening with our money.

Charities already understand this to an extent. Donors get mass-produced bulk mailings with pictures of happy children, but this is the YouTube generation. We live in the information age. I don’t want the exact same glossy brochureware that every other donor in the country received. I don’t want a giving experience that’s throttled at birth by the carefully designed words of a PR company.

People give Christmas presents because they can see the happy faces of the people they give them to. When I can see the face of the person that’s benefiting from my donation, hear them talk, read the charity worker’s personal blog, I will give ten times what I currently do, and I doubt I’m alone.

If you can open a connection between donors and the actual recipients of the funds, then you’ve accomplished two things. Firstly, by letting people see what’s happening they’ll be more inclined to give more. Secondly, by broadening information about causes you create choice; the mechanism through which donors decide which causes are important and which charities are acting effectively.

All the technology exists already; blogs, video hosting, and the ability to get funds from A to B. All it takes is for someone to plug it together.


Marathon Man

Tuesday 15th April, 2008

Congratulations to Justgiving’s own Jan Braglewicz who ran the London Marathon in 4 hours and 26 minutes, raising over £1,600 so far for Sense who provide support and assistance to those who are both deaf and blind.


Behavioural economics meets charitable donation

Tuesday 15th April, 2008

Incentives

As a company, the Giving Group (who run Justgiving in the UK and Firstgiving in the US) has a particular set of incentives. Because we take a transaction fee from peoples donations to charity, it’s in our interests to try and increase the amount donated to charity. This is a good thing for charity because by increasing our profits by a modest £50,000 per year means that we have to generate an extra £1,000,000 per year in charitable donations.

You might ask why charities don’t do this themselves and save some money. The answer to that is in the economy of scale. By building a donation service that thousands of charities can use, we can charge a tiny fraction of the price that charities would have to pay to build one themselves. If we make £10k worth of improvements to the service used by our 3000+ charities we’ve effectively saved them a collective £30m. The trick is this; if charities build their own system, the cost of that is hidden from the donor. You don’t know how much of your donation goes on the salaries of employees or service providers.

The incentive structure and the economy of scale add up to explain why Justgiving has irreversibly changed the way people raise money for charity online.

Behavioural Economics

The study of these incentives is called Economics. It may sound dull but it’s actually the study of human nature and how it’s revealed through commerce. There’s a growing weight of argument behind the field of Behavioural Economics, a field that specialises in studying how our emotions and biases effect our commercial transactions.

Behavioural Economics is particularly relevant to the Giving Group because it’s one way to measure the motivations of people who donate through our services. In other words, it could indicate what proportion of our users are sponsoring their friends because they feel obliged, what proportion are showing off in front of work colleagues, donors’ emotional response to different charities, and much more besides.

Research

There is already research underway into why people give to charity. You can read about some of it at the New York Times. I think we’re in a good place to contribute because the Giving Group has a significant amount of data about peoples donation habits. I think that (without ever intruding on people’s privacy) we should be able to discover what motivates donors who use our system.

An example of this is the new phenomenon of donor fatigue (as discussed in the Independent and the Telegraph). The short version is that people who are repeatedly asked for sponsorship are likely to donate less or not at all. By investigating both the effect, and the currency value, of individuals being repeatedly asked to sponsor friends, we can both assess the scale of the problem, predict future trends, and measure the results of changes we might make to counter any problem.

This research is currently underway, watch this space for interesting developments.