Oxfam and PayPal launch ‘100% Giving’

Oxfam and PayPal have joined forces to launch 100% giving, a groundbreaking new partnership that sees PayPal paying for the running costs on every donation made to the charity in February via www.oxfam.org.uk/giving. According to Oxfam this is the first time ever a UK charity has offered a donation scheme through which 100% of every donation is guaranteed to go directly to the cause. 

PayPalOxfam


Ordinarily, for every £1 donated to Oxfam, 81p goes directly to programme work to tackle poverty, while 19p is spent on essential running costs. During February PayPal will cover these costs every time a donation is made via PayPal.

The initiative follows a new Oxfam report showing that people are often deterred from giving because part of their donation usually goes towards the charity’s running costs. The 100% giving report reveals that 72 per cent of Britons believe running costs eat up a significant part of their donation, whilst 65 per cent admit they have been put off supporting charities because of these costs.   

There is also a widespread misconception about the amount of money that is allocated to essential running costs, with most people believing it is more than three times the actual figure spent (based upon findings from Charity Awareness Monitor, Jul 10, nfpSynergy).

Dr Tom Farsides, a leading expert on why people give to charity, has investigated why the public thinks this way. His key findings reveal that concerns about their own financial welfare – in addition to an overriding belief that a large slice of their donation will not reach those who it is intended for – are the biggest barriers to giving. 

It is hoped that the partnership will establish an entirely new model for donating to charities. For every £1 you donate, PayPal will cover all running costs when you donate via PayPal at www.oxfam.org.uk/giving. Any regular monthly donations set up during February will also have their running costs paid for the first twelve months. 

Despite more than one in five (22 per cent) Britons saying that the recession has made them feel more compassionate towards those who are in greater need, almost half of those questioned (49 per cent) admit that the economic climate will mean they donate less to charity in 2011. 

Annie Lewis, Oxfam Scotland’s Fundraising Manager, says: 

“Our running costs are absolutely essential to allow us to deliver hundreds of programmes in more than 70 countries worldwide. However, we appreciate that these costs can be a barrier for some people who are otherwise completely behind what Oxfam does. Thanks to our partnership with PayPal, we’ve achieved a first in removing this barrier to assure people that 100% of their donation will be going directly to helping the poor people we work with to have a brighter future. 

“At a time when belts are being tightened, it’s vital that charities are accountable. Whilst we are delighted with PayPal’s offer to pay for our costs, we also want to assure people that we keep them to an absolute minimum and are committed to making every penny count.” 

Carl Scheible, PayPal UK’s managing director comments: 

 “We have huge respect for the important work that Oxfam does, and wanted to find a way to support both the charity and people looking to make their donations count in a tough economic climate. 100% giving is a quick and easy way to really make a difference: three clicks to help transform lives. It builds on PayPal’s strong track record as a fast and convenient way to make donations to charity, including Children in Need and Comic Relief.” 

Report author, Dr Tom Farsides (University of Sussex), explains; 

“In challenging economic times people want charities to do everything within their power to provide front line services as effectively and efficiently as possible. Donors want to help, they don’t want to feel like their money is being squandered.” 

I’d love to know what people think about the ‘100% Giving’ partnership.

Is it a step in the right direction towards a meaningful discussion with the public about what are acceptable levels to spend on running costs?

Are corporate partnerships the way forward in reducing running costs?

  • k, posterous/user error ate my first comment, here goes for a reconstruction…good on paypal for the support, and I’d hope that it would act as a jumping-off point for an honest discussion about running costs. However, my fear is that it would further minimise the importance of running costs to the provision of those services in the public consciousness – but maybe that’s a argument that the third sector as a whole needs to advance… how different, I wonder though, is this from trusts & foundations who don’t want to fund staff salaries?

  • Ross McCulloch

    Good points – it’s amazing how many funders still think you can run an organisation without management and admin support. Hopefully the Paypal/Oxfam partnership will re-open the debate about what constitutes ‘running costs’ and why they’re so important.

  • aye, it’s not like we’re asking for people to pay for our duck houses and moat-cleaning, y’know? I think that there does generally need to be more transparency about running costs, so as to dispel this myth that charity "just happens" and also to bolster public confidence – the nfpsynergy research/charity engagement monitor information certainly shows that people think that charities are inefficient and wasteful, and certainly when I moved from the private sector to the third sector I encountered a lot of those attitudes. There needs to be a move away from the third sector being perceived as generally a bit crap – and actually, BeGoodBeSocial really did make me optimistic about the future of the sector in that respect…

  • This is a step in the right direction and as a supporter of Oxfam, it is great to see them take the lead on the issue. The public will understand charities better if we can show them the value of our work, through our transparency and impact. I was recently asked ‘why do you get paid to work for charity?’. Without good staff the sector would fall apart, yet we are a long way from the public understand this. The 100% giving pledge is great news, yet for more of these relationships/partnerships to emerge, it will take time.

  • BB

    I would say that it is sad that people don’t consider paying staff as part of a charity’s work. If this allows debate and encourages a few more donations it may not be so bad – as a temporary publicity drive it’s also good – like a bonus month where all proceeds go direct to the people in need but anything more is possibly very unfortunate.Also, where do you even draw the line between admin and "the cause". Is spending £30 on volunteer expenses okay if they then go out and fundraise all day to get £300?If you pay for a vaccine, is that direct giving, but if you pay for a nurse to inject the vaccine is that "running costs"?I can’t believe how little a charity shop manager gets paid – for all the work they do not just generating money and PR but also supporting local people who have low employment prospects, supporting those volunteers with mental health problems, providing a place for local people to feel fulfilled. The role of a charity shop is so much more than generating income.I think I may have gone off at a tangent though!

  • fun_razor

    This oxfam campaign was clearly not devised by fundraisers, it has the stamp of corporate and brand marketers all over it and the smell of desperation. Like the atrocious ‘humankind’ branding, there is no cause-driven appeal to supporters, only a move away from its fundraising roots as a monolithic corporate mega-charity that has lost its way. People wouldn’t care about reasonable overhead if there was a real need and reason to make a donation. This doesn’t cause people to give at all. And if it does then I guarantee it will be for the wrong reasons and will result in one-off gifts. (By the way, how much did the advertising campaign cost?)

  • When is a charity not a charity? http://www.home-education.biz/forum/general-discussion/10684-charity-home-truths Some of us stopped supporting the ‘big’ones long ago and now only give to local causes run by volunteers.

  • Michael Hodgson

    Ross, you asked for more than I tweeted?Right, what bothers me about this is that it rather perpetuates the myth that ‘admin’ costs are bad and should be avoided. Now are we saying that the HR manager at Oxfam should be got rid of, because without him/her we’d be able to help more people? Or in fact is (s)he performing a vital role without which Oxfam couldn’t do things as well as they do?In which case, why wouldn’t I want 19p of my pound to go towards him/her and things like that?I find it more surprising that Oxfam are doing this, because I’m fairly sure they did something a while ago which was a campaign explaining this kind of thing – Oxfam self defence for supporters – although maybe it was someone else.Oxfam aren’t alone, I can think of a number of charities that claim to have ‘no admin costs’, because their costs are paid by a supporting company – but the problems with this are two-fold. 1. If admin costs were a good way of measuring a charity’s performance, then the fact they’re ‘paid by someone else’ doesn’t mean they’re low?2. Admin costs aren’t a good way of measuring a charity’s effectiveness, not least because they are not calculated in a uniform way across the sector. (Never mind that some forms of charities will naturally have higher fundraising costs than others.I think that this does all charities a disservice – rather than talking about minimising or offsetting admin costs, which are an input, we should be focussing on outcomes.Annie Lewis says that admin costs are essential but for some people they’re a barrier? What happens to these donors in the future when the barrier returns? Are they planning on explaining to them why it’s not really important – and if so, why isn’t it mentioned here?Public perception is that a lot more is spent on admin costs than actually happens – maybe this the first thing to talk about, and at the same time explain why admin costs don’t help you judge very much at all?So does this make it a bad campaign? Well, it might get people who wouldn’t otherwise donate to do so, but I think it would have been better to run the campaign in a different way. If it had been sold as ‘ donate to Oxfam through our site, and we’ll add 20% to your donation", it would have worked better for me – what would others think?

  • anon

    @homeedforums – I used to run a "local volunteer led charity" we were desperate for paid staff – in my experience, volunteers doing this work without paid admin support are burnt-out very quickly and it’s has a serious impact on their mental heath! In order for there to be consistency, at least 1 or 2 key volunteers need to be present for a lot of the time. Expecting people to work for this long with no pay is, I think too big an ask. I would say, if the net effect of employing someone is inc work done by the charity or inc in money then it is a duty of the charity to employ those people.

  • Gift aid would cover running costs. Charities need smart people to deliver in clever, more effective ways. This initiative is good win-win idea that proves the point.

  • Rosie McIntosh

    Good point @Adrianoxfam – gift aid would cover it. I think that’s how comic relief works, although you can’t rely on gift aid for all donations.I reckon there are lots of people who are opposed to the whole idea of running costs, but when you actually break them down they start to make sense. Most people would be shocked if they weren’t thanked for their donation, but spending money on that is about as far from "helping people" as you get. It doesn’t mean it’s not a valuable cost.Hopefully this month will get people thinking.

  • Ross McCulloch

    Going by the comments here and on twitter there’s clearly mixed views about whether or not 100% Giving is a good thing:- Some think it’s an innovative solution to the problem of funding running costs.- Others think it perpetuates the myth that charities overspend on running costs.- There’s also a view that charities should be entirely volunteer-led and have no paid staff.Undoubtedly the Oxfam & PayPal partnership has sparked a really interesting debate that we need to address in the charity sector – what constitutes acceptable running costs and how do we get the public to understand that good management/admin/accounting/marketing/etc makes their money go even further?

  • Anon

    I agree that this sets a dangerous precedent for fundraising, and must not have been devised by fundraisers!What happens when corporate partners, fundraisers, etc all start demanding that 100% of their donations go to the projects, even after February?"Sorry, that was a special offer"?Surely this will cause all sorts of issues for fundraisers, particularly events fundraisers, when suddenly people don’t want to pay in their money to a specific event, they want to donate it via paypal? How will Oxfam keep track of their event fundraisers now?

  • Surely this is just a large corporate gift wrapped up in a clever marketing campaign?I totally agree with all the people who are worried that this sets a dangerous precedent around the topic of charities using part of their donations to pay staff, raise awareness etc.Very little in this world comes for free and so if you want to raise money you need to spend money. Having dedicated professionals makes this process work harder and consequently raise more money for less waste, but even dedicated professionals have to pay their mortgage and feed their children.Considering the HUGE amounts of money that is paid to those in our society that benefit no-one except their shareholders and the local BMW/Audi dealership, I think the modest amount that I get to try and ensure that more people with terminal illnesses can have the choice to die at home surrounded by those that love them is a small price to pay.

  • I believe this 100% giving scheme is a great way forward but disagree with Oxfam’s statement that: "this is the first time ever a UK charity has offered a donation scheme through which 100% of every donation is guaranteed to go directly to the cause". The charity I work for, Newlife Foundation for Disabled Children, completely protects fundraising and always guarantees donors that 100% of their gift will be used to provide vital pieces of equipment for disabled and terminally-ill children.

  • Bobbit

    Axelle – if 100% of what people donate goes on equipment, how do you pay you staff, your designers, maintain your website….? Is everyone a volunteer? Is all your office space and stationery donated?

  • Michael Hodgson

    Bobbit, Axelle – there are a number of charities that claim 100% of your donation goes to the cause.Some do this because they don’t separate out ‘admin’ from the cause. "The cause" is fixing problem a. everyone who works here is working to solve problem a – even the receptionist. Other use a corporate donation to cover ‘running costs’, so that all other income is going 100% to the ’cause’/’beneficiaries’. Of course, this doesn’t mean that less is being spent on photocopying, stationery than otherwise, it’s just a different way of presenting the facts.Having said that, my charity’s running costs are relatively fixed. I’m paying for stationery regardless of whether you donate or not, so you could argue that 100% of YOUR donation is going to the cause – the costs are already there.All of which is why talking about ‘costs’ is irrelevant.We don’t care how much apple spend on ‘admin’, we just care that they make a decent product. I don’t care how much you spend on admin, if you’re doing a great job of solving the problem I want solved.

  • Ross McCulloch

    – "The cause" is fixing problem a. everyone who works here is working to solve problem a – even the receptionist. -I couldn’t agree more but I do think there’s merit in being open and transparent with donors about where money goes within an organisation.I don’t agree with the Apple analogy. They’re a profit making business, charities are not. So if a non-profit spends £100k a year on paperclips it’s a real cause for concern – regardless of how good you are at solving problems. If Apple spend £100k a year on paperclips it’s only a concern for their shareholders.

  • Axelle Parker

    Newlife Foundation for Disabled Children has been offering donors the opportunity to make a 100% restricted donation for well over 10 years. We guarantee, and the evidence is shown in our audited accounts, that this is the case.We are able to this by ensuring that much of our costs are covered by our trading earnings and by the work of volunteers. This then allows us to honour the donation and the fundraising that individuals and groups make to us, by ensuring 100% is spent on what the donor decides e.g. someone donates or fundraises £1,000, Newlife buys a £1,000 pain relieving bed for a disabled or terminally ill child in the UK, adding any additional funds to make the purchase possible from our other income. We have years of experience doing this and always feed back to the donor on how their restricted gift has been spent.

  • Michael Hodgson

    Agree that you should be open and honest, and I suppose, yes, £100,000 on paperclips might be cause for concern, but the analogy stands for me – as long as you’re being open."We lost a lot of paperclips" – bad, but…"We spent £100,000 on paperclips because as well as using them in the office (£3,000), we included one in a mailing we sent to 200,000 people detailing how paperclips are used as a torture instrument, and asking for donations to help stop this. We’d tested the mail and knew the paperclip outperformed the base mailing, averaging a 10% response. The campaign generated over £4m in income with 60% from new supporters. We expect this to create an extra £100m in the next 10 years."A bit of transformation is needed. At Disney, even the people sweeping the streets are proud to be there, they’re part of the Disney experience. The receptionist at Oxfam (for example) should feel as proud and important as anyone else, but this doesn’t happen nearly enough, because she’s just an ‘admin cost’.I think the drip drip drip approach is needed, with *all fundraisers and charity staff* explaining why ‘admin’ costs exist, how the charity works to keep all costs right down to a minimum – regardless of whether your charity has ‘good’ or ‘bad’ figures.From time to time when speaking to companies, groups etc, I’d be asked, "how much of my donation goes to the actual work".I’d answer along the lines of "glad you asked. XX spend 10% on ‘admin costs, this includes fundraising and admin like the receptionist you spoke to last week when you called the office…Now, I think you’re asking because you want to know that we’re using your donation wisely, and that’s not the best way to find that out. It costs £90 to do xxx. Our admin costs are 10%, so we took your £100 and will do xx; we use the other £10 to bring in another £100, so we can do it again.Sometimes, depending on the audience/time etc, I’d use an example like Pallotta’s soup kitchen (one has higher admin costs, but serves more people better food in a better environment)This post is turning into a long way to say, yes, open and transparent is the way forward, and focussing on outcomes not input costs will always be better.Imagine if PayPal and Oxfam had said something like for "PayPal will donate 20% of every donation you make through their site this month" That means that for every farmer YOU help us train, (http://www.oxfam.org.uk/shop/oxfam-unwrapped-gardeners/OU5059AG), PayPal will provide 5 bags of seeds for them. (http://www.oxfam.org.uk/shop/oxfam-unwrapped-gardeners/OU5002AG)Train a farmer, and PayPal will give them 5 bags of seeds.THAT’S something that would get people donating, and wouldn’t perpetuate the myth that they can do this without administration.As an aside, this page is interesting:http://www.oxfam.org.uk/oxfam_in_action/what_we_do/binmyth_slideshow.html

  • I Yasin

    Hello, I work for Oxfam and would just like to clarify our claim mentioned above. The claim that, "this is the first time ever a UK charity has offered a donation scheme through which 100% of every donation is guaranteed to go directly to the cause" is in the context of the leading sentence which makes clear that this is in relation to the partnership with PayPal. So our claim is:Because a corporate partner is paying the running costs, this represents a completely new form of charity giving in the UK. It is therefore the first time a charity has offered a donation scheme in which it is *guaranteed* that 100% of your donation will go directly to the cause (due one corporate partner paying the running costs resulting in *incremental* income that we would otherwise not have received). Its great to see this debate – we all recognise how important running costs are to our charities, and for us, this is a way to highlight this in a positive way, whilst also encouraging new donors.

  • Michael Hodgson

    Hi YasinThanks for clarifying the claim – although I’d argue it’s far from clear. Several charities claim that ALL of their donations go 100% to the cause.Personallly, I still think it’s a poor concept, especially since there seem to be two sets of figures on the Oxfam ebsite relating to what the admin costs are.I thought blog readers might like to see this too:http://www.civilsociety.co.uk/fundraising/blogs/content/8199/paypal_pays_oxfam_running_costs_a_double-edged_sword

  • Ross what’s interesting is that you explain the offer better than Paypal. On their website it seems that they contribute nothing, just passing on your donation in full to Oxfam. Which isn’t a great offer – I’d write a cheque to achieve that. How does tax rebates / JustGiving fit into this picture???Seems to me a bigger offer from Paypal would have been to stump up a huge cheque for the running costs for a month, leaving any donations to go straight to the good cause. But they’d never do that, would they?