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Mint Links #3: Virgin Money Giving

Posted in by Andy Bell on 15 July 2011

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JustGiving, launched in 2000, often used to be held up as a UK dot-com success story.

Recently I've seen lots of people using their competitor Virgin Money Giving (Launched October 2009), including, ahem, young Ramzi Bell. I know, a sponsored swim for a 10-month-old is ridiculous.

Initially I thought it was a shame to see a big corporate like Virgin is ripping off a plucky little startup like JustGiving. But Virgin Money Giving is a not-for-profit. Unlike JustGiving, there's no monthly subscription and no charges on Gift Aid. They do charge 2% on transactions, but that is lower than JustGiving's 5%.

They've taken a for-profit business and reinvented it as a not-for-profit. As Bill Gurley notes in The Freight Train that is Android, having a good financial reason to give something away puts a company in a wonderful position. It is almost impossible to compete against.

I don’t know if a large organized industry has ever faced this fierce a form of competition – someone who is not trying to “win” in the classic sense. They want market share, but they don’t need economics.

On a smaller scale than Google, that's what Virgin Money have achieved. As a cuddly charitable endeavour, that's pretty clever.

Considered as a piece of advertising for Virgin Money, there is a touch of genius to it. The giving pages are highly viral (I couldn't help myself from linking earlier) and have feel-good vibe. As has often been noted, the rhythm of successful advertising online isn't about campaigns and interruption, but about long-term relationships and real usefulness.

Is it cynical to call Virgin Money Giving advertising? There's something hard to categorise about projects like this and Pepsi Refresh and O2 Think Big. On the one hand, you want to believe the motivation is public spirited. On the other, it seems reasonable to assume there is a return on investment calculation behind it. Perhaps that isn't even important: if they make the world a better place, does it matter that they are the fruit of cold business logic?

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    Laura

    15 July, 2011

    Here's a nice comparison chart of all the UK's leading online giving services: http://www.rossmcculloch.com/comparison-chart-of-all-uk-online-giving-serv

    JustGiving is clearly more fully-featured, but it's also the only service that charges on Gift Aid, has monthly subscriptions, and actually makes a profit as a business. It's still got a great following amongst the third sector though, but maybe the other services are the better choice for individual short-term fundraisers?

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    Martin Keane

    15 July, 2011

    I think the main point for me with JG is that they know the sector so well and they are always trying things, testing and innovating. I think it is a comfort for us charity folk to know that really clever folk are driving the sector forward :)

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    Laura

    15 July, 2011

    Good point Martin, I particularly like what JG are doing with #justtextgiving at the moment >> http://www.justgiving.com/justtextgiving

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    Andy Bell

    15 July, 2011

    Martin - do you think innovation justifies an extra 3% of the donation being taken by the intermediary? I guess I can see that in the long run the sector might benefit from that innovation, but as a donor I'd rather see that money go directly to the cause I'm supporting.

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    Toby

    15 July, 2011

    The question of motivation is an important one. Clearly JG's original motivation is driven by wanting to support social change, however, their model is dependent on a high commission fee to remain sustainable. Virgin can subsidize by shifting marketing budget towards their platform and ultimately give more away, however, they are motivated by bottom line returns, brand exposure and most importantly recognition. The question I like to ask when trying to reconcile these conflicting sets of motivations is "who are the people behind the initiatives?" Brands like Timberland, Nike, Nokia, Starbucks etc, who have all launched 'social change' or CSR initiatives in recent year's are lead by brilliant social innovators who have been brought on because they have made it their life's work to make a difference and change the world for the better. It's the people that create change, not companies.

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    Dan Benton

    19 July, 2011

    As an event organiser I have been trying hard to work with all the fundraising companies. The more people raise the better in my book. It has become obvious that Justgiving really don't care about the charities, the fundraisers or the events organisers. I have been to their events, talked to them in person and basically been shrugged off.

    VirginMoneyGiving on the other hand have been awesome! We are only a small event but VMG opened their doors to us, tried to help us as we grew, told us where they couldn't help as well as where they could and were generally a pleasure to work with.

    Combined with all advantages above we have taken to recommending VMG over JG to our racers.

    Oh, and I really wish VMG would make more of the fact you can raise money for up to 5 charities and them money gets split equally. Something that none of the other fundraising sites do and has been loved by our participants.

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    Andy Bell

    23 July, 2011

    Toby and Dan, thanks for your comments - interesting perspectives

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