Charities are facing an "existential threat" by being cut out of the giving process through an increasing use of charitable fundraising techniques by companies, a report is claiming.

The report by think tank Rogare and Kingston University Business School looks at the idea of “disintermediation” in fundraising, where increasing use of donation pleas from firms and others is looking to “displace nonprofits in giving, asking for support and providing aid and help”.

Company fundraising cited in the report includes brands asking customers for donations or to donate by becoming a subscriber.

Mozilla Firefox, which is run by the Mozilla Corporation that is owned by the Mozilla Foundation, is an example given of brands “using charitable fundraising methods to fund commercial activity”, claims the report.

Another is The Guardian newspaper, which a decade ago began mixing its member subscriptions “with a pure donation model”, states the report.

“Companies normally make money by selling products or services to customers; don’t make products the customers want to buy, and the company will go out of business,” states the report.

“Over the past few years, some companies have been asking their customers to donate money to their commercial enterprise (and use established fundraising techniques to do so).”

It adds: “In other words, they are using the language of charities. Once you click on the link, the messaging is only about the subscription and all mention of a donation is dropped.”

The report also warns that “there could be clear cases where this would displace charities” for example if a business outcompeted a charity to win a service contract and then ask for donations to deliver it.

Meanwhile, their report also found that B-Corp, social enterprises and community interest companies are also deploying fundraising as a further threat to charities.

“It’s perhaps not an overstatement to say that disintermediation represents an existential threat to the nonprofit sector,” says the report, called Death by a thousand cuts.

Citizen fundraisers

Another threat charities face is from “citizen fundraisers”, who raise money for good causes “done by lay people out-side the remit of the fundraising profession”. This is often carried out through fundraising platforms and on social media

The report uses the example of Russia’s invasion of Ukraine four years ago when “giving to charity was not the only way people channelled their money” to help Ukrainian communities.

One way that emerged on social media was for people to book a room in Ukraine but not take up the booking. This meant that those letting rooms received a booking fee, who people perceived were the victims of the conflict.

This form of giving was carried out by bypassing international aid charities and local partners. In a single week 434,000 rooms were booked, with £15m transferred to the hosts.

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