Where the Money Goes
How We Protect Your Data
How We Cover Our Costs
Transparency is crucial.
Not everyone (especially not in fashion – see: "Background: The Fashion Industry") can provide full transparency. But luckily, we can. Below you find all the information about that important topic: First, we tell you exactly where your donations go, then we describe and explain our structure (including use of data and, yes, also our revenue model), and everything you possibly might want to know.
Most important question: where do your donations go?
First of all: NOTHING of them will be used to cover FairBuy’s own costs. Unlike most charities, we found a revenue model to cover our costs WITHOUT cutting your donations. They are, indeed, forwarded untouched.
The account receiving your donations as well as the amounts by which sponsors might increase your contributions is owned by the FairBuy Foundation gUG (see below), from where it will directly be forwarded (without any substractions, just in case this hasn’t been emphasized enough… ; ).
The money will be forwarded to social impact projects taking care of the garment workers’ issues. We carefully select those projects. The focus here lies on a) urgency and b) impact. Urgency means that the most pressing problems are the first ones to be relieved. Impact means that only high-impact projects will receive money from the Foundation, projects which are run professionally and efficiently and which initiate real change. Possible examples would be an emergency fund for fast relief in accidents or consultation to garment workers - such as campaigns to inform the garment workers about their rights and the existing minimum salary and touchpoint (e.g. an ombudsman institution) where they can turn to if their rights are not respected.
Of course you will always know where the money goes to.
The donations collected currently will be forwarded to the Rana Plaza Donors Trust Fund (See: Background – The Fashion Industry).
It is part of the Rana Plaza Arrangement, managed by the International Labour Organisation, to pay compensation to the victims of the collapse of the Rana Plaza building.
Reasons for that choice:
People have lost lives, limbs or loved ones. This cannot be “compensated”. But in addition to the sorrow brought about, it also translates into the loss of the ability to earns one’s livelihood – or of a family’s livelihood earner. The fund seeks to relieve the financial worries of the victims. The amount needed for a minimum compensation of the victims is estimated to be $40 million. Less than $18 million have been paid in/pledged so far by the fashion industry, which is why the arrangement asks for help from private donors.
As soon as we have reached our first milestone (€10k), we will forward the money to the Rana Plaza Donors Trust Fund. (In case we don’t reach that milestone, whatever amount we will have managed to collect will be forwarded anyway.)
We have carefully chosen the entire setup and also the legal structure for our venue according to our requirements:
I) To proceed your donations untouched: Unlike many other charity organisations, we don't deduct any transaction fees from your donations to cover our operating costs. The only fee deducted ist the fee for the payment provider, which is added in advance (you are informed about that in the topping up process) – so the 50 cents for each item remain indeed untouched.
II) To provide the setup for a revenue model (see below) which allows us to cover our operating costs in oder to continue operations and spread the movement, thereby enhancing the impact of Fashion Offsetting.
III) To guarantee the security of your data. We guarantee you that we will never ever give any of that data to third parties – and want to make sure that no one else can either.
Therefore we created a structure of two companies, used by some other charity companies with the same or similar requirements.
The “FairBuy Foundation gUG”
(short for “FairBuy Foundation gemeinnützige Unternehmergesellschaft (haftungsbeschränkt)”) – or short: the Foundation – is a charitable company (and registered as such).
The Foundation owns the charity bank accounts (where your donations go) and the app (and therefore all the data generated by the app). This charitable status has several benefits (some might call it restrictions, but for our cause, they are indeed benefits; ).
It allows us to issue donation receipts (which is also what we need your e-mail addresses for), which we send you in the early following year, so you can deduct your donations from your taxes.
It prevents anyone (even us, if we suddenly felt like it) to use the money for any other use than the one it is dedicated for (so, for example, we cannot use it for short-term investments or similar shenanigans).
It also prevents anyone (again, us – but this always also accounts for possible other future owners of the company, they cannot simply change the rules) from using data collected by the app in any commercial way. In other words, even if we wanted to, we cannot sell your data. And even if we were planning to sell the entire company, the data generated by the app may not be used commercially. [And yes, we chose this structure during discussions about one company (to which I had not wanted to give all my friends' names & numbers) simply acquiring another company (to which I had granted this access) and thereby all this data (for an estimated 19billions - you know...]
Anyway, in Harry Potter II someone says “Never trust anything that can think for itself if you can’t see where it keeps its brain”. In startup economy, it could read “never trust a service (or app) if you can’t see the revenue model (=how the providers finance the operation)” – this is why we are open about our revenue model.
The FairBuy Fashion Offsetting GmbH
We invite third parties who care about the fashion industry or the garment workers’ wellbeing to partner with us. These parties could be institutions, foundations, companies, private persons – anyone. Most probably these will be stakeholders from the fashion industry.
We offer them the possibility to increase your* contributions to encourage you to make your statements.
In return they are displayed on the thank-you-screen (the screen you see after you made your statement), and can use that space to show their logo or information they want you to know – usually they will also display a link leading to more information. For this, they pay a small fee to us. This part of FairBuy is NOT a registered charitable company, but it adheres to the principles of social business as lined out by Prof. Muhammad Yunus, which means it will be reinvested for the growth of the company.
*They can choose which contributions they top up (for example for brands or “cart sizes” etc) – but WE will do the matching, the data (e.g. user name or offsetting behaviour) will NOT be given to anyone..