DonateNZ – The “Who”, “How” and “Why”
It’s an inevitable question, running DonateNZ, that we get asked “So, how do you guys get funding and make a living?”. Unfortunately it’s a question I don’t have an answer to presently and what keeps me awake all night. “How much should I tell them?” I ponder. Should I tell them my family has essentially donated over $300K to DonateNZ to get it off the ground? Should I say I don’t earn a wage and my Mum works at a florist shop by herself all day to support both her, Dad’s and my own living? No no. They don’t want to hear the whole story. So I tell them the abridged version, or when someone looks to be in a hurry, I just tell them we have community funding, as we don’t want peoples sympathy or their charity. We simply want people to believe and participate in the DonateNZ movement we have created.
It is perhaps this stiff upper lip, “we can do anything”, “we don’t need any help” Kiwi attitude which has gotten us to this place we are at now. As, taking a birds eye view of the situation, we must sound either incredibly crazy or incredibly stupid. One would assume that we have lots of money to throw around, however I assure you that’s not the case. We are not crazy, or stupid. We’re not hippies with an entirely unrealistic dream and we certainly aren’t rich. My parents and I are simply 3 Kiwi’s who got sick of sitting around complaining about the state of the nation and decided to put a great community idea into action. That idea was that with an easier method of communicating, we could all contribute a lot more to our community. Thus began DonateNZ, the website where you can connect what you no longer need with an organisation who can use it.
DonateNZ began with a business model in 2006. It was not created to make a lot of money, we simply hoped I would be able to earn a living from doing it. In addition to this, business is all my family has known and when we began exploring the option of being a charity, funding would have taken anywhere up to a year to secure. “Far too long!” we said, “NZ needs this service now, let’s do it!” we cried.
So after my first meeting with the bank manager, we secured our first loan of $150k against my families business (Roses Are Red) to get DonateNZ started. Our business model was to earn $100+gst from every Recipient member who signed up and that we said, would make the service sustainable. We were away! However, fate was not on our side. After getting away to a flying start and a couple of months into business, our web developers dropped the ball. And by “dropped the ball” I mean they kicked it right through the china shop, refusing to pay for damages and then fleeing the scene. Every business has to deal with website issues, it’s rife in this industry. However, in our web based business’s infancy, we were essentially crippled. Services were broken and traffic was exiting as fast as it was coming in. All and all, we were not able to do anything we were promising in our sales pitch, nor were we any closer to coming up with a solution. (It is noted, despite this and solely due to the overwhelming popularity and support of the DonateNZ idea, we still managed to win “Best Government or Community Site” with that site at the Netguide Awards – beating the IRD and ARC!).
We were screwed, literally. Alas, we continued to fight with these jokers to fix their mistakes, but it didn’t happen. We came to a turning point, near the end of 2007. Either stop now and cut our losses or get another site made. We could have got out then and returned to our cave and licked our wounds, but we didn’t. It may have been because we were too stubborn and proud to admit defeat but I truly believe it was because we knew in our heart we were doing a great thing – something that every New Zealander wanted and needed. So by hook or crook we were going to make it happen. All the chips were on the table.
We went out there to find a website developer and unfortunately no one would work over the existing site, so we were forced to rebuild a new website from the ground up. So, off we went to the bank manager again…… The next $150K loan (over the family house this time), financed a whole new website and the next year of running costs. Our new website built by Terabyte was launched in August 2008 and that’s the awesome version you see now. It’s not quite finished though, as more work and user driven improvements are needed and you guessed it, more money is needed to make that work possible. While people think that charities should and do get everything for free, this simply isn’t possible.
As we reached the end of the second $150K loan, we came to the realisation (maybe a little late) that we are not able to do this all ourselves. We could keep trying, but at the end of the day, my Mum simply can’t work any more hours in the day to provide funds and DonateNZ will not be the best it can be without help from the rest of the country who in the end are the total beneficiaries of the site. That’s what it’s all about, an awesome service for all New Zealanders, is it not?
Thus, we incorporated the Donate Charitable Trust. Given the changes with the charities register, it took another 7 months from the date of our registration to get our application processed. When our registration came through, we began to “sort out and close the business books” so to speak. It wasn’t fun, trust me. There is no rule book on how to turn from a business into a charity but the objectives have stayed the same throughout, but the paperwork, oh my!
As well as incorporating a charitable trust, we also made the decision to make the service completely free to community organisations, from the 1/4/09. While a risky move, this has seen the number increase by 500% in the past 6 months as well as prompted a higher success rate of donations and wishes being filled. All round, this has resulted in allowing the site to serve its purpose better, as well as allowing us to leverage more promotion and partnership angles given a larger database.
Now, DonateNZ (run by the Donate Charitable Trust) is able to seek funding from local government, gaming trusts, private foundations and others who wish to donate. We are IRD tax exempt and have our “charitable wings” so to speak. But how on earth could we get funding? I started by checking myself into everyone funding application course I could find (rather like rehab!) and I came out of this starry eyed, thinking in order to obtain any of the millions of funding dollars which are out there, you just needed to fill the forms in properly. Alas, it’s not that easy. Funding it seems, is not going to happen overnight, or even in a few months. I’m hoping, like Pantene says, that it will happen! We are now onto our 21st funding application, none of which have been approved thus far. In our case, based on off the record comments from funders, our problem seems to be that we do not seem high-priority. Websites (despite how much good they do), I suspect, never will be. We were told we don’t seem needy enough and we are also too professional! Both things that I have never regretted until now, when the fate of DonateNZ literally hangs in the balance. I take some comfort in the fact it isn’t just us however, organisations from right across every sector are struggling to secure funding.
Not content to just sit back and wait for funding to come our way, in June of this year the Trust started planning its own fundraiser; a raffle whereby all our members sold tickets and received 50% of the sale price. Having secured a massive prize pool, ordered 75,000 tickets and just awaiting what we thought to be a formality; our raffle license, we were discouraged to hear that this raffle is prohibited by the Gambling Act rules. It seems you are not able to pay a commission to members selling tickets, therefore making it impossible in any way to have a large number of organizations participating and get reimbursed proportionately for their efforts. A fact which has essentially blown the whole campaign out of the water and we are back to square one.
We want to become an organisation which is able to sustain itself and at the end of the day, the largest stakeholder, our customers, should be contributing something if the service is working for them. Therefore, we want to build into the website a system which prompts people to donate when they have used the site a certain amount. Again, in order to make this money, money needs to be spent on development to put the procedures in place.
So, as you can see, we are somewhat in a limbo. We do not have funds. What we have is a extremely large mortgage, good will, running costs (kept to as minimal as possible) still being covered by Roses Are Red and an even larger commitment to make DonateNZ work. I shall continue sending funding application after funding application and I will take every denial letter in my stride. I will think outside the box and approach ever possible angle for funding I can think of and is suggested to me. I know each day we win small victories and that these will add up and eventually we will succeed in securing sustainable funding for our venture. We know we’re doing the right thing and that every person and organisation in New Zealand can and will benefit from the system we have built. I just hope at some point that New Zealand will get on board and return the support we have given it, so we don’t go belly-up from doing this.
So that’s it, that’s the full story laid bare for better or for worse. Feel free to share your opinions, thoughts and feedback. As you can imagine, I’d especially love to hear from anyone who wishes to help us, in whatever capacity that may be. Or if you feel significantly moved enough to make a donation, please do so here.
Creator, CEO and only staff member
Donate Charitable Trust (aka Donate NZ)