An extra five hundred million for charities? Here’s why See the Difference is too good to be true

According to Dominic Vallely, one of the founders of the soon-to-launch charity video sharing website See the Difference, it is like being at the beginning of Google. At least that’s what he told me when I visited his offices last week.

Vallely restated his bold claim in terms more relevant to the sector. “Children in Need and Comic Relief pioneered the idea of donating through a telethon,” he said. “We’re pioneering the next big thing: the video revolution for charities.”

It’s difficult to believe that fundraising is about to be radically shaken up – after all, a lot of charities already have videos on their websites and share these on Facebook and Twitter.

But Vallely, who was previously a senior producer at the BBC, has some big backers, including Microsoft and Virgin Money Giving. He’s ambitious: he has set the website a fundraising target of nearly £500m in its first five years.

And there’s more to it than just a library of charities’ videos, which would rely on donors bothering to go to the website and watch them. The point is to make the charities’ work a talking point, so people email videos to their friends and post them on their blogs and social networking pages, just like they do with YouTube already.

But before charities start getting over-excited, there are a few things to bear in mind. You can’t just send the videos you’ve already made: they have to fit the See the Difference model of telling a story that highlights a specific project, and pledging to tell supporters exactly how their money was spent.

This means making sometimes complicated accounting arrangements so you can ensure that £10 donated to a specific school in, say, Tanzania, is actually given to that school.

The site intends to cater for a young, headstrong generation who demand to know exactly how charities spend their money and who are sceptical that a monthly direct debit would be absorbed into general running costs.

If See the Difference gets these people giving, it will have succeeded where many charities have failed. But the website could have a different effect: of reducing unrestricted income as people give directly to specific projects.

And in the long term, it creates a cultural shift. Charities are telling their supporters, in effect, that they have a right to decide where their money goes. Surely a charity’s staff, who have knowledge and experience in their field, should decide on the most sensible allocation of funding? Will it become tough to raise general funds if a “donor choice” attitude becomes widespread?

But there could be £500m at stake here – about a one per cent increase in the total level of giving in 2008/09. For that amount, giving more of a say to demanding donors could be a risk worth taking.