Is it wrong to profit from charity?

Hey everyone, hope you’re having a great weekend. I’ve got quite a tricky question to throw at you today as it’s on a subject that is close to the hearts of many for personal reasons and that’s the subject of charity. This week was children in need week over here in the UK and during the week Mrs.B and I ended up having quite an interesting conversation about the morality of making a profit from charity occasions. Here’s how it started.

On Friday my eldest boy – Well I say eldest but he’s actually only in his first year of school – had a non-uniform day at school and all the kids had to go to school in their pajama’s. Not only did they have to wear their PJ’s but they also had to wear something spotty in support of the Pudsey Bear campaign. We didn’t really have anything spotty for him to wear so we started looking for children in need items online. Soon enough my wife found herself looking on a large UK supermarket’s website at one off Children in Need items available for purchase. She found quite a few nice items but most of the good things had sold out. She then thought that she could instead find a spotty scarf or something like that on eBay so she looked on there too. Stick with me here, I’m getting to the point.

On eBay she came across some of the items which were exclusive to the supermarket whose website she’d been scouring 5 minutes earlier being sold by individual sellers. It seems as though some people had bought the items simply to inflate the price and then sell them on eBay. She turned to me in shock saying ‘ I can’t believe people are making profit from charity!’. I encouraged her to have a look at the eBay listings to see if any of the people we’re giving the profits away to children in need. Well, some were giving maybe 10% of the profits to charity but most didn’t seem to be giving anything at all. There were also other Pudsey items being sold on there where the sellers didn’t seem to be giving anything back.

The other thing I found interesting though is that she didn’t seem to have any problem at all with the fact that a big supermarket was selling Pudsey products and possibly making a bit of profit from it in the process. So we went online and had another look at the website of the supermarket in question to see whether ALL of the profits from charity products sold were being handed over to Children in Need, the answer was pretty inconclusive. The page was full of lines like ‘With a donation from every sale going to Children in Need’ but there was no mention of the percentage of the donation being made or how much profit was being made by the company themselves from each sale, if any profit was being made at all.

I just thought the conversation threw up some interesting questions. Is it ok for people to profit from charity? If you think it is, then is it only ok for large chains to profit or should the little guy making charity items from home or re-selling items on eBay be allowed to profit too? If you don’t mind the little guy making a profit, should they be forced to make a donation when selling charity specific products? Finally, what do you think the size of that donation should be in terms of percentage?

There are other area’s we could talk about here but there are so many questions to think about already, I thought it best to discuss just this one area today.

What do you think?

I Also just need to give a quick shout out to a few people. Firstly I want to thank J. Money for featuring one of our posts on his new website Rockstar Finance this week, it drove a nice bit of traffic our way so thanks for that J. Also Money Bulldog was mentioned in the following carnivals last week so thanks to these guys too.

Carnival of Financial Independence #36

Carnival of Financial Planning

Earn More, Spend Less: Volume 10

Carnival of Financial Camaraderie

Yakezie Carnival – Veteran’s Day Edition

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14 Responses to Is it wrong to profit from charity?

  1. moneystepper says:

    I don’t think that it is wrong to profit from charity. In fact, I think that it should very much be encouraged!

    Dan Pollatta changed my opinion in his TED presentation, when he said:

    “We have a visceral reaction to the idea that anyone would make very much money helping other people. You want to make $50m selling vinyl and video games to kids, go for it, we will put you on the front cover of WIRED magazine, but you want to make half a million dollars trying to cure kids of malaria then you are considered a parasite yourself”.

    I’ve included the link below. Its a great video – well worth watching:
    moneystepper recently posted..How accidents can change your perspective on life and moneyMy Profile

  2. dojo says:

    Well, there are people who run charities and get a lot of money for themselves too, so I don’t see why others wouldn’t. From what I understand (correct me if I’m wrong) some people buy the stuff sold through the charity’s store and re-sell at a higher price? If it’s the case, the charity still gets their money and the ‘giver’ is getting something in return. Sure, ideally people should donate money, but at the end of the day, if the charity gets their money I’d say it’s a good deal
    dojo recently posted..How are you gonna spend the holidays?My Profile

    • Adam Buller says:

      Yeah that’s a funny one as well because I have sold things on eBay in the past when I’ve spotted a rarity in a local charity shop window, which I have no problem with because I bought it for the price on the ticket. In this scenario though it seems that people were buying up lots of these cheap Children in Need items from the supermarket as they could see they were selling out fast and then selling them for more money on eBay, kind of like they do with sold out tickets, toys and as we’ve written about in the past, Amazon products. When I think about that happening I can’t help but feel that it kicks a little against the spirit of the occasion in an attempt to make a quick buck, which is odd for me because I’m usually happy to make a quick buck. I understand your point about the charity still getting their money though.

  3. I guess I think it’s ok for businesses to profit from charity, since if you think about it they have to generate the funds to keep running their business in order to do things like support charity drives. I don’t think I agree with the little guys on Ebay who sell charity items and don’t even donate a portion of the proceeds, though.
    Dee @ Color Me Frugal recently posted..Color Me Frugal is joining the Yakezie Challenge!My Profile

    • Adam Buller says:

      Yeah I have no problem with operating costs being deducted from the sale of charity items but I’m not too sure how I feel about the business actually profiting from it, still undecided on that. Totally agree with your point on eBay sellers though, they should at least hand a percentage of the profit over.

  4. These are all good points above, however there’s still something very unsettling for me putting ‘profit’ and ‘charity’ in the same sentence. Maybe the main thing that frustrates me is the fact that the lines are so blurred in terms of how much money actually gets to the charity themselves. Saying “for every … you buy, we’ll donate to a charity” is simply not good enough in my eyes. If you’re going to make a profit from charity, then at least be honest and straightforward about it – then people can really decide for themselves which charities they should give their money to.
    Jess@allthefrugalladies recently posted..Comment on Hanukkah on the Cheap by Tory BlumMy Profile

    • Adam Buller says:

      Hi Jess, I’d Echo everything you just said there. I often wonder what percentage gets lost along the way so I’d rather pick a smaller, local charity and give directly than buy something from a shop with little to no disclosure regarding the actual amount reaching those in need.

  5. On an ethical level, it sounds wrong, very wrong. But being practical, i think individuals profiting from a good cause isn’t that bad. In the grand scheme of things it stabilises the market and ensures the charities are getting something. I’d much rather people make a bit of profit from charity items than the charities go completely bust!
    Simon @ Modest Money recently posted..Barclaycard Arrival World MasterCard ReviewMy Profile

    • Adam Buller says:

      Interesting thoughts Simon. I suppose like Jess said for me the problems come when the lines become blurred. I’d say that no one should profit 100% from charity with nothing being given back and if a percentage of profit is being made then complete transparency is essential.

  6. Agree with Jess. The lines are too blurred sometimes. Read Confessions of a Microfinance Heretic and see how when they’re mixed, motives shift and the profit becomes more important than the charity.

    However, there are many for-profit charities out there that do a lot of good. You just aren’t going to find them because they’re not making a lot because the charity is more important than the profit.
    Ben @ The Wealth Gospel recently posted..A Plea for Donations for Typhoon Haiyan VictimsMy Profile

  7. Definitely an interesting question. I don’t know if I can fault them for making SOME profit it they’re the ones who are getting it distributed so that more donations can be collected.
    Stefanie @ The Broke and Beautiful Life recently posted..The Financial Pros and Cons of CommunityMy Profile

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