How We Do It: The Seemingly Impossible Challenge of Building Software as a Charity

“How do you finance all this?!” This being all the fundraising software we build for charities. The question was asked at a recent Charity Town Hall we hosted in Ottawa by one of our charity partners. He had come from an IT background and knew a thing or two about software development. At the same time, he knew that CanadaHelps is a charity. It was a great question.

We’re celebrating our 20th anniversary this year and we are all so proud of all we have achieved. Our charitable mission is to make good fundraising technology accessible to all charities — particularly for smaller charities — and over the last six years we have launched three major fundraising platforms for charities (Customizable Donation Forms, Peer-to-Peer, and Ticketed Events), and fully re-launched our website for donors. Today, more than 20,000 charities in Canada rely on the technology we’ve built.

The truth is, building software products on a tiny >2 percent margin (the portion of our transaction fees we keep after we pay credit card and payment processor fees) is almost a miracle compared to other for-profit software companies. That 2 percent finances everything we do, from software development and fraud detection, to customer service, tool set up, and charity education. We have neither the backing of a corporate subsidiary, nor the venture investment other software companies have. 

It is also hard for us to raise money, even as a charity, because many funders recognize us as an infrastructure and capacity-building organization, but there is insufficient recognition of capacity-building as a worthy cause to fund. We’re incredibly grateful for the donations we do receive from individual donors and foundations, but it is not enough to make a dent in our significant costs of running a technology organization; for that, we must rely on generating revenue much like a business does.

So how do we do it? Well, it’s hard. The 2 percent margin I mentioned before means we must generate in the range of $15,000,000 to $30,000,000 in donations to finance a major software project. This is done by our small, in-house marketing, engagement, data, and development teams; each year, we grow our impact by investing all that we generate from transaction fees back into increasing and optimizing all that we do. It takes not only solid competence, but passion, ingenuity, ambition, and frankly, courage. It often feels impossible! A good example is our Donor Management System (DMS), which will launch in July and has been an enormous undertaking. We took it on because we know it is needed in the sector, but it is a massive amount of work with significant up-front costs.  

As an organization, pulling this off definitely comes from our team and our culture. We’ve deliberately built an ambitious, highly accountable culture of passionate people. We do our best to work quickly, cut out bureaucracy, and use agile decision making. We are strategic in how we invest our resources, and keep a close eye on the needs of our charity partners and the competitive market place. These are all common business techniques but our “secret sauce” is using them in combination with a deep dedication to the success of the charitable sector. 

We do our best to work quickly, cut out bureaucracy, and use agile decision making.

We get approached by investors and for-profit companies who would like to acquire us or invest in us for equity — after all, we have achieved extraordinary growth by any measure, which makes us the envy of any company, for-profits included. But we are not for sale! 

We are proud to be a charity and to tie our fate to the fate of other charities in Canada. We are all in. We value our independence for the sake of our charity partners.

• We don’t want to be driven by any other agenda beyond doing what is best for the sector and charities. 
• We don’t want to be here today and then leave to pursue more lucrative markets tomorrow. 
• We don’t want to be “free” today but then start charging fees tomorrow when the corporate agenda changes. 
• We don’t want to have any secondary motivation to confuse us and make decision-making hard. 

Our independence is critical to what we do. We want to be steadfast, honest, and a constant presence and option for the sector because, in many ways, we are sector-owned.

We think it’s important that there be a player like us — however hard it is — to keep all companies operating in this space focused on the best interests of charities, and to lift the bar of what is offered to charities. This is not just about software products, but all the pieces that go into what we do: customer service, bilingualism, consultation, and more. We go the extra mile because that is what we are here to do.

So as I said in Ottawa, we are committed to continuing to do our very best and to playing our part in helping charities go through this extraordinary period of digitization and the shifting landscape in which they are operating. Indeed, we are privileged to be doing so.

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