Philanthropy Vs. Capitalism: rambling towards understanding giving to charity

Ahead of a fundraising innovation workshop next week, I’ve been thinking again about the differences between philanthropic and capitalistic thinking for charities.

For the purposes of this rambling stream of thoughts about how charities can understanding ‘giving’ in a different way, here’s some definitions:

Philanthropy: private initiatives, for the public good.
Capitalism: private initiatives, for the private good.
(For completeness, Government is public initiatives for public good)

From a Charity (big ‘C’: organisation with charitable aims, rather than small ‘c’: being charitable) perspective, philanthropy is a one-way value exchange, meaning supporters pass value, mostly through financial donations to the charity but don’t receive any value in return. And capitalism is a two-way value exchange, meaning customers pass the value of their cash to an organisation or other person in return for receiving the value of goods or services.

Capitalism, as the dominate economic model in western society, has lots of history and theoretical models behind it to help us understand it and apply some of that thinking to charity fundraising, but first where did philanthropy come from?

Where does making charitable donations come from?

Financial donations to charitable organisations was fashionable among the middle classes in the 19th century, and through the twentieth century, with the shift in social classes and social mobility, making donations became something other classes did too.

This means that the making of charitable donations has always been very closely connected to social class.

The BBC class survey showed the class make up across the UK as:

  • 6% Elite – the wealthiest and most privileged group in the UK
  • 25% Established middle class – the most gregarious and the second wealthiest of all the class groups.
  • 6% Technical middle class – a small, distinctive and prosperous new class group.
  • 15% New affluent workers – this group is sociable, has lots of cultural interests and is in the middle of all the class groups in terms of wealth.
  • 14% Traditional working class – this class group scores low for economic, social and cultural factors, but they do have some financial security.
  • 19% Emergent service workers – this class group is financially insecure, scoring low for savings and house value, but high for social and cultural factors.
  • 15% Precariat – this is the poorest and most deprived class group.

Understanding social class is important in understanding charitable giving as class is made up of income, education, social networks, and social contacts, and all of these things that affect a persons ability and proclivity to donate.

Donating is a social act.

What makes people donate?

Reasons for donating to charity can fit into three broad categories:

  • Purely altruistic – motivated by supporting the good done by the charity.
  • Impurely altruistic – motivated by the expectation of getting some value from knowing they have contributed to the good for the charity.
  • Not altruistic – motivated by wanting to show friends and family that they are a ‘good’ person.

Charities assume, under the philanthropic model, that all charitable giving is ‘purely altruistic’. Capitalistic thinking might say that pure altruism is a myth and that a donor is always motivated to derive some value, even if it’s just feeling like a good person.

Supply and demand in charitable fundraising

“In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.”

The same thinking could be applied to the supply of fundraising products by charities against the demand from impurely-altruistic and not-altruistic supporters. In this context ‘price’ means the value derived by the customer.

Quantity of fundraising products in the market

If there are fewer causes to donate to (either perceived or actual), the value of those causes increases. The value here can be thought of in terms of greater awareness for supporters and so an increased propensity to donate.

The more ‘asks’ that are put in front of supporters, the lower the value of those asks. A flooded market is no good for charities or supporters as it drives down the value of each fundraising product.

Imagine a world with perfect social equality, no environmental damage, and no disease or life-threatening health conditions. The majority of charities would have no reason to exist. Those that managed to find a reason would operate within a high demand market, pushing up the value of their fundraising offer.

Value of fundraising products in the market

This is where social contracts/act of donating comes in. If making a donation meets the needs of affirming a donors values, triggers empathy and connection, allows to let people know they’re doing a good thing, etc., then it has a higher value in the market than an ‘ask’ that doesn’t deliver these benefits.

Would you rather donate £10 anonymously to provide massages for stressed businessmen in Tokyo or to provide nurses for sick children in your local town and be able to post about it on Facebook? Option A doesn’t meet the social contract of donating and so has low market value, whereas option B has a higher market value as it includes aspects of the social contract.

The right number of asks giving the right value return equals equilibrium and so optimisation for the fundraising offer.

However, it often seems that charities, working under the philanthropic model, do a lot of work in trying to get the ‘ask’ right; creating new campaigns, testing images, optimising donation forms of web pages, etc., but do very little about delivering value to the donor. Made a donation? Here, have a thank you letter. Not a great value exchange, if you think about it from a capitalist point-of-view.

So, charity fundraising as an industry, charities, and those who work in fundraising, need to shift away from the idea of philanthropy as one-way value from donor to charity, to capitalism as a two-way value exchange between donor and charity. Once this kind of thinking is embedded, then they can start asking the question: what do donors really want in return for their donation.

Week notes #98

What happened this week…

  • Met with the Cards team to prepare for Christmas Cards.
  • Discussed building testing a customer services chatbot.
  • Set the Christmas cards advertising budget.
  • Reviewed dropship processes for phase 1 of RMSP.
  • Created banner images for the new Online Shop.
  • Confirmed the license for Magento 2.
  • Wrote descriptions and took photos for Christmas cards.
  • Took part in a card sort exercise for CPR content on the website.
  • Met with iWeb, our Magento agency.
  • Began reviewing the frontend of the new Online Shop.
  • Audited the content for the Selling Defibs onboarding journey.
  • Discussed events merchandise with the Events Team.
  • Met with a new supplier for supporter merchandise

Read this week…

Doing next week…

  • Testing the front end of the new Online Shop.
  • Meeting with the Giftware team.
  • Gathering product information for Defibrillators.
  • Fundraising Innovation Workshop.
  • Discussing setting up Dotmailer for the Online Shop and Selling Defibrillators.
  • Supporting Retail Customer Services to go live with Freshdesk.
  • Gathering product information for the new wedding ranges.Setting up Beating Hearts Ball tickets.
  • Sharepoint training

Interesting stat of the week…

  • Last week, 33% of our customers came to the Online Shop from organic search. That’s a 472% increase on the same week last year.

In the not too distant future….

  • Magento 2 User Guides for Customer Services.

Risk assessment by certainty of cost and value

Risk assessment by certainty of cost and value

When assessing the risks of a new piece of work the questions should be around how certain are we about the cost and value of the work. The more certain we are about the cost of a piece of work and the value of the outcomes, the lower risk of the work. This leads to prioritising more certain work over less certain, and making more uncertain work less uncertain.

Week notes #97

What happened this week…

  • Redesigned our Delivery Note in the new branding.
  • Began planning stakeholder engagement and communication for Selling Defibs.
  • Met with the Buying Team to move to a quicker buying model for Supporter range.
  • Built a customer service chatbot using the Freshdesk API.
  • Learned how to set up forms in SiteCore.
  • Spoke to NHS Digital about ambulance service open source data.
  • Confirmed data protection processes for Selling Defibs.
  • Supported Retail Customer Services in setting up Freshdesk.
  • Presented a Selling Defibs project update to the Commercial Director.
  • Discussed website structure and content for Selling Defibs.
  • Discussed finance processes for CPR kits, Defibrillators and Health At Work.

Read this week…

Doing next week…

  • Planning for a summer sale event.
  • Discussing a chatbot for Customer Services.
  • Writing descriptions and creating images for Christmas cards.
  • Meeting with the Cards team to plan Christmas cards.
  • Reviewing dropship processes for phase 1 of AX.
  • Meeting with our Magento agency to discuss progress with M2.
  • Writing test cases for Magento 2 functionality.
  • Meeting with the Events Marketing Team to discuss Events Merchandise.
  • Meeting with a branded products supplier.

Interesting stat of the week..

  • Comparing Conversion Rates by Traffic Source over the last six weeks to the same time last year, Social has increased 325%, Paid Search has increased 91% and Referral has increased 80%

In the not too distant future…

  • A new range of Supporter goods.

Customer service chatbot using Freshdesk API

Having built a chatbot that uses the eBay API, and with the idea of a customer service chatbot floating around, I decided to see if I could build a chatbot that uses the Freshdesk API to pull content from the Help Articles into a chat flow to answer queries from customers.

The bot introduces itself as any good bot should, and then asks the customer how it can help.

Customer service chatbot using Freshdesk API

The buttons that the bot displays are dynamically populated by querying the results from the Freshdesk API to find out what top level categories are available in the Help Articles section on Freshdesk.

When the customer selects the appropriate category the bot dynamically creates buttons again from what is returned by querying the sub-categories in Freshdesk.

Customer service chatbot using Freshdesk API

And when the customer selects a button the bot will calls the content of the Help Article and displays it in the flow.

Customer service chatbot using Freshdesk API

The bot then checks if that Help Article is what the customer is looking for. If the customer selects Yes the bot tells the customer that it’s glad and ends the conversation. If the customer selects No, the bot allows the customer to contact a human by raising a ticket in Freshdesk.

The bot is very simple, partly because there aren’t very many Help Articles to pull from, but it demonstrates that using the Freshdesk API to populate the buttons on the fly can work and means that the content only needs to be maintained in Freshdesk and not within the chatbot.

Backwards looks like the right way round

Backwards looks like the right way round

A director emails two managers about building something new to solve an existing problem.

The first manager says:

  • Let’s have a meeting.
  • We’ll have to get more resource.
  • We’ll need to understand the requirements.
  • I’ll write a Proof of Concept Document.

The second manager says:

  • Let’s build it.
  • We’ll get customers using it.
  • We’ll learn loads about what customers actually want.

The first manager is solving organisational problems. The second manager is solving customer problems.

In a large, traditional organisation, the first manager looks like the one who’s doing it the right way. The second manager is a heretic who isn’t ‘thinking strategically’ and is considered to be doing it the wrong way. But it’s backwards. Delivering value to the customers and starting to learn about their problems as soon as possible should be what’s important. That’s the right way round.

Blockchain for charities, a talk by Rhodri Davies

Why should charities care about Blockchain?

  • Blockchain offers new ways for charities to achieve their mission.
  • Blockchain will change the way organisations operate.
  • Blockchain may create new problems to be addressed by charities

Charities don’t have the luxury of thinking they can get away without thinking about disruptive technology.

Charities need to understand the nature of the changes Blockchain will cause or become irrelevant.

Disruptive = doing stuff in a way that makes the old way obsolete.

Cryptocurrency & Blockchain Technology

Blockchain for charities, a talk by Rhodri Davies

Non-financial blockchain uses

Blockchain for charities, a talk by Rhodri Davies


What are the key feature of blockchain tech?

What does blockchain enable?

Civil Society Blockchain Possibilities (part 1)

Civil Society Blockchain Possibilities (part 2)

Week notes #96

What happened this week…

  • Discussed the public positioning of the chain of survival.
  • Mocked-up a page on the Online Shop for selling defibrillators.
  • Added 7 new greetings cards to the Online Shop.
  • Interviewed First Aiders about defibrillators in their workplaces.
  • User tested menu categories on the Online Shop.
  • Learned about a competitor’s sales process.
  • Requested images of people wearing items from the Online Shop for the new homepage.
  • Booked onto the iPos training course to support selling defibrillators logistics processes.
  • Discussed the Online Shop at Phase 1 of RMSP.
  • Prepared for a presentation about our plans for selling defibrillators.

Read this week…

Doing next week…

  • Holding the Accessories Team monthly meeting to discuss clothing rebuys.
  • Meeting to discuss evolving how we buy for our supporter range.
  • Putting together our Christmas Card Advertising plan.
  • Discussing stakeholder communication plans.
  • Gathering Christmas Card product information.
  • Meeting the new Web Applications Solution Architect.
  • Learning how to set up contact forms on the main website.
  • Discussing data protection for selling defibrillators.
  • Testing the new Magento 2 site.

Interesting stat of the week…

  • Comparing the first five months of this year to the same period last year, we’ve seen Conversion Rate increase by 42%. The greatest increase was 319% from Social traffic, then 57% increase from Referral traffic and a 37% increase from Organic traffic

In the not too distant future….

  • A ‘test and learn’ approach to new products on the Online Shop.

First Aid at Work Training

Completed First Aid at Work Training with St. John Ambulance.

The way the course is run has changed since the last time I did it. There seemed to be more of a dumbing-down of first aid techniques, perhaps in recognition that the majority of first aiders are unlikely to retain more complicated techniques and apply them correctly, and that making the course simpler means more people will do it. So, it’s better to have more people with less knowledge than fewer people with greater knowledge.

Talking about first aid, and the causes of injuries got me thinking about complacency again. I think complacency is the root cause of the majority of injuries; didn’t think driving fast would be a problem, didn’t think to check the smoke alarm batteries, didn’t think to look both ways before crossing the road, etc., etc.

Developing a mindset of planning ahead, figuring out what the right procedure is, and following it in a habitual way is the solution to complacency. Then its ok to not think about the thing that you would be complacent about because the procedure takes care of making you do the right thing.

Testing images for charities

A selection of our images and stock images were tested and this is a summary of some of the outcomes:

  • People look at facial expressions, especially mouths.
  • People facing towards the camera offer better impact and being able to see their eyes to gauge emotion is useful.
  • Images with a clear purpose resonated, for example seeing someone wearing a branded T-shirt helped better connect with a fundraising ask or gave that sense of wanting to help. People wanted to be able to visually identify a charity and will look for badges and logos.
  • When showing a survivor, provide clear visual clues such as scars from surgery.
  • Don’t use shots of people wearing high-fashion (really well-dressed people) as apparently this is off-putting.
  • Don’t show images that could bring people to do the opposite of what you want, e.g. someone eating chocolate when we would want them to abstain –we’re not good at processing negatives.
  • Show images with hope, not shame – people connect emotionally.
  • Staged images weren’t well received – such as a baby dressed up in a Santa outfit. People felt manipulated. There is a fine balance between making people feel bad about themselves, against tapping into emotion to prompt people to react and donate.
  • Images showing concern makes people want to take action, but with a medical image of someone with discomfort made people turn away.
  • Natural poses and settings make people identify and comes across as warm and genuine.
  • Selfies did not read well, as people in them did not comes across as connected to cause.
  • Everyday people were more relatable – not super-fit super models.
  • Moments at the end of the race and demonstrating a sense of achievement were well received (rather than mid-race, partway through ‘the struggle’).
  • Groups of people / crowds tested well.
  • Images of babies tested better than of older children to show a sense of urgency and to prompt donations, as did black and white photography.
  • Real (recognisable) medical equipment tested better than graphics – and even more so if in use in a realistic setting such as a hospital.
  • To demonstrate ‘money making a difference’ images of researchers tested better than images of survivors as the latter give the impression of helping ‘only one person’.
  • Showing several researchers working rather than a single researcher gave the impression that more was being achieved.