Appendix B – FAQ

This is a mixture of questions we have been asked and questions we have asked ourselves, selected to cover what we see as the bigger moves away from current thinking and the more serious concerns about change.

Why introduce an extra organisation between the donor and the beneficiary?  Surely that’s more wasteful and less accountable?

The much bigger waste is when many organisations, that as far as the donor can see are very similar, compete against each other for the donor’s attention and money.  That on its own can be enough to justify an extra tier of organisations. This brings new opportunities for donor representation, which can have a positive impact on accountability.

Why would donors choose to give up the ability to choose individual projects?

They still have that option, and we expect them to use it for “local” giving.  By choosing directly every project they support, without some level of delegation, we see no way for donors to satisfy all the basic needs we’ve identified.

How can people interact meaningfully with a simple numbering system that’s meant to capture complex decisions across a charitable sector with a hundred thousand organisations?

We essentially want to ask people to set the budget as if they’re the executives of their own trust fund.  Unless they want to invest in specialist knowledge – and most people don’t and shouldn’t need to – then they will need to trust and delegate decisions at some level.  We have chosen a level which we think is most accessible while addressing significant needs that were previously unsatisfied, and we have laid out where we think it could be improved.

You say you want people to give 1p to a large number of charities – are they really going to believe it works or bother?

It is purely a logistical issue, with a number of ways to achieve it.  We have seen a raised awareness of the effectiveness of crowd-sourced funding with sites like Kickstarter; people do put their money behind the idea that they can be a small part of something, and we think there’s much more mileage to be had.  Already at our small scale we got down to 62p donations behind the scenes. What isn’t feasibly effective is telling everybody they need to interact directly with hundreds of projects, or thousands of organisations offering fundamentally similar services all advertising directly to the general public; this is where we need a new type of service.

Don’t you need a large number of people to sign up before this makes any difference?

We’ve taken the approach of designing something that works well at a small scale that can be adopted incrementally, instead of carrying out market research to find out whether there’s already a large number of people looking for this.  The number of recipient charities in a portfolio can start off small when the number of donors is small, and the approach achieves a notable improvement in coverage over each donor giving alone. What we’ve achieved gives an individual a way of donating that complements current options, and that, if many people do it, promotes efficiency across the sector as a whole.  This on its own can make some donors a lot happier in their giving even before the scale is achieved, and keeping donors happy in their giving is vital. We have outlined ways in which individuals can avoid negative giving characteristics, and ways a service can facilitate and improve this.

What evidence is there that donors would give significantly more?

It’s also about having healthy relationships between the donor and the sector, but we would expect to see a substantial increase in donations.  We have applied generic reasoning about happier customers spending more, alongside the factors for current dissatisfaction we have identified.

Shouldn’t we focus more on the beneficiaries than the donors?

We ask how to get more money to beneficiaries, and our answer is to treat donors well – this would be lesson one in customer service in any other field.  While charity can be fundamentally different from business, we just think that this is the common sense approach. This in no way compromises the beneficiaries, and is entirely compatible with improvements in representing them.

How much should people be giving?

We’ve focused on how to give, rather than how much to give – giving as if you were investing millions.  A quick answer would be to leave it to individuals to determine the right amount for them.  We expect that there are many donors who would appreciate more detailed guidance on this, but we felt that this would require a detailed analysis far beyond our main scope.

We can offer some very broad guidelines:

• You can afford something from your income unless you’re at risk of poverty.
• People with more disposable income can give disproportionately more.

With news focusing on increasing inequality in societies, why have you focused on giving options for the general public rather than high-earners?

As the general public already feel that they should be giving to charity,¹https://research.kent.ac.uk/philanthropy/content/uploads/sites/667/2019/06/how-donors-choose-charities-June2010.pdf our aim has been to remove obstacles in their way and alleviate any feelings of dissatisfaction with their own giving.  For the particular problems we have looked at, we think that high-earners – with the same charitable needs as anyone else – don’t actually have better options than what we have described, so we would recommend that they follow the same methods, and there’s no reason to consider them a separate group.  Aside from that, there is simply more disposable wealth in the larger group.

Which charities will lose out with this approach?

We would anticipate some level of change within the sector, and it will be valuable for any large-scale services to include charities in managing this change, to reduce and plan for disruption arising from budget changes.  Ultimately the goal is to reallocate funding without omission, in order to increase the overall funding available, and if any charities cease to operate permanently then the service provider will need to account for this. We would draw attention to services falling outside our scope, particularly where it might not be clear that donors still need to support these individually – charity work that has a significant lobbying component, as is the case with some homelessness, domestic abuse, environmental and human rights work for example, was ineligible for funding during our project.

Why not focus on the wealthy instead?

Although high-wealth individuals account for a smaller proportion of charitable income now, that does not take into account their potential, so we consider this to be an open question.  We chose to work with what we already knew, which is that individuals with low discretionary income want to give effectively to charity, and looked for ways to make it a more mutually positive experience.  We consider that developments such as The Giving Pledge indicate that many of the wealthy are not averse to giving away substantial amounts and are primarily concerned about the method of doing so, which raises the exciting possibility of tackling that problem collaboratively to satisfy both groups.

What about relying on one big charity in each category?

This is close to the status quo in some ways, where there are one or two go-to household names for a charitable category.  On the whole, while it might do a good job of reducing the number of charities we need to think about, if it effectively eliminates competition then we don’t see it as a healthy outcome for donors at this time, not least because evidence that charities currently understand what their donors are looking for is limited.  Instead, we envisage a small number of services working across different categories and competing efficiently against each other on donor satisfaction. Over time, we will find that different donors prefer different services because of how they interact with donors and how they select charities across the sector. Donors are then happier and giving more; charities are spending less money and administrative time on acquisition and retention of donors, and more on the work they care about; services have an incentive to support new charities being set up in response to new problems or ideas.

Our point about the number of charities in the sector is that it is too many for most donors to work with and too many to have in a single competitive domain.  We do not think that there are too many in absolute terms.