A social enterprise could unlock ‘hundreds of millions of pounds’ through a service that allows members of the public to donate to charity without handing over any cash themselves.

The scheme is the brainchild of a social enterprise called Cleversquirrel, which reclaims commission charges that are applied to many financial products like pensions, investments and insurance even if no advice has been given on them. This charge often goes unclaimed as many individuals do not have a Financial Services Authority-regulated advisor to claim it, which is a requirement, nor can it be cancelled. 

Cleversquirrel is authorised by the FSA to find these fees and convert them to charitable donations. Users decide which charities their donations go to. All the donations are handled by Charities Trust, one of the UK’s largest donation agencies and a charity in its own right.

Users create an online profile for themselves on the Cleversquirrel website, and can submit their details to find out if they can use the service, as well encouraging others to sign up.

Brian Bennis, founder of Cleversquirrel, tells Philanthropy UK, “I’ve been a financial advisor since 1981. We earn long term income for looking after clients. But there are fewer advisors now and this means that there is more money that isn’t claimed. I realised this would be a great way for individuals to donate to charities at no extra cost to themselves.”

Those with relevant policies can authorise Cleversquirrel to claim this money, and donate it to a charity of their choice, who will benefit from the commission annually, while Cleversquirrel charges 20% to cover its own costs.

Any profit that Cleversquirrel makes is shared between their charity panel. This currently includes WWF-UK, Cancer Research UK, British Heart Foundation, Food for the Hungry UK, Home Start International and St Peter & St James Hospice.

Bennis says, “The size of the UK market in these commissions is £2.5 bn annually. Probably half of this is claimed by advisors. The other half is up for grabs. There are literally hundreds of millions available for charities, if we can get the word out.”

Not all investments or insurance policies are relevant. Those who register on the Cleversquirrel website will get an indication of whether their policies are relevant before they submit all of their details. Typical policies and investments that do not carry this sort of charge include car and travel insurance and company pension schemes.

Bennis says Cleversquirrel is not looking for people to draw money away from financial advisors who provide them with advice, but points out that many people are providing commission to those who have never actually given them any advice.

One Cleversquirrel user raises £1,113 annually for Project Harar, a charity that offers treatment to people with severe facial disfigurement in Ethiopia.

Cleversquirrel already has hundreds of individuals signed up online, and has thousands of pounds of donations in the pipeline for charities, says Bennis

“A huge amount of money is effectively locked in waiting to be paid, and individuals can make sure this goes to charities of their choice,” Bennis says.