Journey of a Social Entrepreneur – The Giving Machine

| No responses | Posted by: Malcolm Dean | Theme: Social Innovation & Investment

By the turn of the 21st century Richard Morris had helped launch a series of successful innovative technological projects – both in impact and financially – involving electronics, data and broadband in the US as well as the UK. One company, launched in the US in 1997, was valued at over $2.3 billion in 1999. He was only 33.

Back in Britain where he and his wife wanted their children educated, he continued to pursue both commercial work and charitable activity, but his heart was somewhere else. In his words, he had been well rewarded by then and now wanted to create something to support ‘the many amazing people working or volunteering in charities, community organisations or schools’.

His first initiative, a website built in his Bishop’s Stortford home, selling household goods with the profits going to local schools and charities never took off because of its local limitations. With the help of a businessman friend, he realised: instead of selling things, why not become an intermediary agency between online retail sellers and online buyers and pass on the commission paid by the retail sellers for the referrals, to charities and schools nominated by the buyers.

giving_machine

A new enterprise emerges
Slowly, in a year of weekly consultations with three friends, all fulltime businessmen, in Richard’s living room in Bishop’s Stortford, TheGivingMachine project emerged. His three colleagues had relevant specialties – technical knowledge, finance and marketing – that all played a part.

The simplicity of the scheme has been the key to its success. Online shoppers sign up with TheGivingMachine , where they record the charities or schools to which they wish their commission earnings to be given. Every time they go online to shop, by going through the Giving Machine’s website, 75% of the commission that they earn from the seller goes to the agency to be forwarded to the nominated charities or schools.

Seven years on from the launch in 2007 – with annual increases averaging between 20 and 30 per cent – it now has 77,000 ‘givers’ making donations to 6,000 UK schools and charities. Over one million donations worth over £730,000 have currently been made.

Simple but hard work
The scheme may be simple but creating the website, recruiting the online retailers for links on the website, and training the staff to run it all required strenuous efforts. Richard was responsible for the latter two jobs. Negotiating the recruitment of retailers began with the biggest online retailers – Amazon, eBay, Argos, Best Buy but now most of the famous names from the ‘High Street’, the FTSE 100 and Fortune 500, making up some 800 online stores, are on his scheme’s website. That was all new to him, but he was much more familiar with his other initial task, organising and training the staff to run the technical services.
There were some intermediary agencies already doing something similar when Richard launched, but none giving away 75% of the takings to schools and charities with the other 25% retained to finance the running costs. The Giving Machine remains the only not-for-profit social enterprise helping online shoppers generate free cash donations for causes they support every time they shop. The scheme is in the process of applying for charitable status. As Richard notes “it would be better understood. The current label ‘a not-for-profit social enterprise’ is such a mouthful.”

There are further benefits beyond charitable donations which TheGivingMachine generates. Firstly it avoids the guilt-based sales approach that most big charitable appeals use. Secondly, although it is already a national scheme with ‘givers’ in all counties of the UK, it is easily adoptable by small community organisations. Thirdly, in Richard’s view, it helps create connectivity between customers, retail companies and local communities.

A new connectivity
Its rapid expansion , for example, has been chiefly achieved by word of mouth, not marketing. In Richard’s words: “The customers feel good, providing donations for free to their favourite causes when they buy online from participating companies; the companies are happy because they too are indirectly helping schools and charities and improving their corporate responsibility reputation; schools and charities are delighted by the new source of funding.” Surveys have shown that shoppers thought much more positively of the participating companies than their competitors that did not engage.

The YF’s accelerator programme steps in
But why, with so much previous experience involved in start-ups, did Richard apply and was selected for the Young Foundation’s first accelerator programme? The programme was designed to help small charities with good ideas to learn how to expand. He explains: “I was not so arrogant as to believe I had nothing to learn about social enterprises. There was a lot I did not know. I knew how to build a business plan to attract money for profitable returns. But if your main aim is profit, it is normally at the expense of others. In the social space this is different. I wanted to steep myself in the social investment scene.”

He is full of praise for the accelerator programme explaining: “It was great to bring ventures together to help each other to next steps. It was great for help on basic stuff: what do you want to achieve; can you articulate that in terms of where you want to be and how you are going to get there. Blending social impact and financial performance in these areas was new for me. It helped ensure I got a good grounding in articulating social impact and how that can help drive us forward.” The programme allowed him to think more widely about capitalist economies, which he has set out in a book, ‘Givenomics’, self published with Panoma Press last year.

His four tips for people contemplating a new social enterprise were:
• Be clear about your vision
• Get into business early and evolve rather than wait to get everything right
• Start delegating the operational stuff as soon as you can, so you can keep steering the ship
• Don’t be afraid to make money – it’s essential

The future vision
The Giving Machine has already become a ‘Big Tent’ rather than an operation for ‘cultists’. The donations are drawn from sales of £26 million. But Richard believes much larger growth is possible over the next five years. He talks of a tenfold increase if the exercise can be extended internationally. Watch this space.

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