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.