h1_bkg

Cashback websites promising charity donations? Don’t get excited

Last week was a busy one for online fundraising.

First, Oxfam announced the launch of Compare for Good, a price comparison website that will donate two thirds of its profits to the charity.

Then ‘cashback’ website Quidco announced it will follow suit. Like Compare for Good, it makes money from commission paid by online retailers for directing shoppers to their sites. It pays that money straight into shoppers’ bank accounts, but soon Quidco will start allowing users to give the cash to charities instead.

So should charities start getting excited about this ‘cash for free’? After all, Quidco claims it could raise £35m for the sector this year.

Well, not yet. Until December last year, the Clever Squirrel website, which reclaims advisers’ fees on insurance policies and other financial products that are sold directly to the public, gave the reclaimed money to charities.

But after it carried out research that found 20 times more people wanted to keep the money themselves than have it given to charity, Clever Squirrel started giving the money straight to individuals. Since then, it has seen its number of users skyrocket.

The Giving Machine, a site similar to Quidco that lets users give part of the commission payment to a school or registered charity, proves a similar point. Users can’t keep the ‘free’ money for themselves, but the majority choose to donate it to local schools rather than charities – presumably to help their own children.

The theory behind these sites is that if people are offered money for free, they’ll be happy to give it away. But it seems most people are not. Whether due to greed, hardship or a mixture of both, members of the public want to keep all the money they can get.

So I’d be very surprised if a lot of people started giving away their Quidco cash. The Compare for Good model, which doesn’t let users keep the money but does offer them a useful service, looks more viable for the time being.

That is, until another price comparison site starts putting its commission payments back in shoppers’ pockets.

  • stolen stolen

    Dear Peter

    Charity is not social investment so in a time of growing charitable need there will be less charity available from the Big Lottery Fund due to government intervention.

    What’s galling is that social investment can make its own way except that the sector lacks the competence to create the financial models of social investment needed which would draw commercial investment.

    So while no blame is attached to you personally, you are about to effect one more case of stolen legally.

    Stolen

  • Richard Caulfield

    Can’t let you write a Blog without taking a little issue with you Peter!

    In your first paragraph you refer to ”being more than a cash-machine’ – which infers you may have been in the past. I think this is the straw that breaks the camels back for me: I am fed up of people talking down grant programmes, whether government or lottery, as if they were some hand-out that people did no work for: yes the lottery gave grants and the sector worked bloody hard to deliver against them. I have never seen an organisation just accept a grant as a hand-out: and you used to have lots of people on the ground who monitored these organisations who came to your cash machine – they were much better placed to know things were being done than the way grants are currently managed at a distance.

    if you wanted to overcome a perception of being easy money then the lottery ought to stop any grants where they are clear people are not delivering or they believe things are happening inappropriately – otherwise phrases like ‘handouts’ or ‘cash machines’ are a slur on all your grant recipients and I am confident you didn’t mean that!

    As for the issue around Social Investment – i wouldn’t say it was so much an issue of Government interference i would challenge but the openness of the phrase in the guidance: your interpretation is fine by me – but it might not be down to you to interpret forever!