By Andrew Davidson

Take two women: one a City lawyer turned banker, the other a multilingual journalist turned charity boss. Shake gently. And out pops Justgiving, the charity fundraising dotcom that is becoming a seriously profitable business. Just tread lightly when asking about their motivation.

“I didn’t set it up to make money. That’s an important distinction,” says chief executive Zarine Kharas, shaking her head.

Managing director Anne-Marie Huby is equally firm. “It just makes us sharper, being a for-profit company,” she says. Not least, it means Justgiving can pay competitive salaries in a technology service sector where talent is at a premium.

Or does it? Kharas and Huby, when I ask, can’t agree where they benchmark their salaries, but that seems par for the course in a singular business with 56 staff that has rewritten the fundraising rulebook. It has also annoyed some in the process.

Kharas and Huby have created a dotcom company that now dominates online charitable giving, providing a platform for most of the money pledged to good causes online in Britain, and taking a 5% fee for doing so. In the process, they have helped to raise £532m since 2001 for more than 8,000 charities in Britain and America.

The business, still backed by 16 original investors, could be heading for flotation, and wouldn’t be the first to mine money out of charity. The tech giant Blackbaud, which supplies software to America’s not-for-profit sector, floated on the New York Stock Exchange in 2004 and is now worth more than $1 billion (£625m).

That makes critics uneasy. They distrust Justgiving’s near-monopoly, and feel its 9m users might still mistake the operator as a not-for-profit venture. Kharas, who won the RSA’s Albert Medal this year for “democratising fundraising and technology for charities”, says Justgiving simply sells a service. It wants to empower givers, and make money to improve itself constantly.

The reliance on fees also means she can turn away venture-capital firms that once rejected her. “I remind them of what they told me nine years ago,” she says crisply. “It would never work.”

It works now, and that’s why Sir Richard Branson has launched Virgin Money Giving, a rival whose unique selling point will be a smaller fee, and whose payback may be the chance to sell financial products to people who use its system. Virgin Money has just bought a five-year sponsorship of the London Marathon to back it.

A long-standing rival, Bmycharity, was relaunched this month on a no-fee basis, funding everything by advertising and sponsorship. We are about to see online marketing war declared.

Not a problem, says Huby with a smile. “There is so much headroom in this space, and we are very focused on the needs of charities, and what they need from us is serious investment. They want our systems to streamline with their own, they want us to be completely Facebook-centric, they want new forms of payment . . .”

The two founders make an odd couple. Huby, 42, is tall and tenacious, a former Belgian radio journalist blessed with covergirl good looks and a media-friendly manner. She made her name in London as UK head of the international charity Médecins Sans Frontières and was a familiar face on BBC1’s Question Time.

Kharas, 58, is short, funny and intense. Pakistani by birth and Cambridge educated, she is a poshly-spoken intellectual who lost faith with law and banking, and wanted to start something that would make a difference. She thought up Justgiving, before asking Huby to help launch it.

Both are formidable persuaders. Justgiving has pitched hard to get charities onside, enabling individual fundraisers to organise large groups of givers swiftly — no more tattered sponsorship forms — and small charities to reach a wider audience.

And Justgiving has still only scratched the surface: online giving accounts for 2% of total donations in the UK and 5% in America. That is growing rapidly as more users learn to trust the internet.

As for the profit motive, Kharas and Huby argue that it has to be that way because Justgiving has taken the risk, developing innovative software, upgrading and expanding. And it only takes its fees from the gift-aid tax relief it automatically collects, so all the money pledged by supporters reaches the charities chosen.

Other revenue options, such as advertising and sponsorship, could not have provided the same income so quickly. And Justgiving is transparent about its methods.

“The disciplines brought to bear are greater in a for-profit business,” says Kharas, “and that way, we’re better able to meet the needs of charities and supporters.”

Huby, part of the team that made Médecins Sans Frontières into an admired marketing machine, says they are providing something charities simply couldn’t do themselves. “Charities shouldn’t be taking risks with donors’ money where technology is involved. This is a different level of complexity.”

They found that themselves this summer, she adds, when Justgiving launched a new platform that crashed. It refunded transaction fees for a week. “We messed up,” admits Huby, “but we had a terrific July afterwards. And charities told us, ‘That’s why we prefer you to do it. It’s hard’.”

Both make light of Virgin’s appearance on their turf, targeting that 5% fee, but they must be worried. Kharas says they can change their revenue model. Huby says the key is investment. She doesn’t believe that Bmycharity’s no-fee stance will work. “I take my hat off to them for daring to introduce a new business model in this space, almost beating Virgin at its own PR game, but it’s a very brave choice. To make advertising work in a sustainable way, they will need significant volumes of traffic, which, looking at the figures on their site, they don’t appear to have. If their intention is to keep investing in their product, it will be a real challenge.”

That flinty logic unpins Justgiving’s softer-sounding exterior. Huby runs the day-to-day management. Kharas focuses on strategy and expansion, particularly the Firstgiving subsidiary in America, where the donation sector is worth $300 billion.

The two women dovetail well. Both are good listeners — keen to attune Justgiving to the sensitivities of its market — and broadly experienced. Kharas, the youngest daughter of a Parsi engineer, has worked at two City law firms, Linklaters and Simmons & Simmons, and the bank Credit Suisse First Boston. Her last job before Justgiving was an unsuccessful stint heading a small direct-mail firm.

Conversely, the charismatic Huby, whose father was a road gang foreman, was brought up with radical politics and understands the charity sector inside out.

Those who know both say their achievement should not be underestimated. “They are very energetic, driven people, and they have needed to be,” says James Kliffen, head of fundraising at Médecins Sans Frontières UK and a former colleague of Huby’s. “They have virtually invented a whole new way of fundraising.”

Because of that, other charity chiefs say the for-profit nature of Justgiving is not an issue yet. “Do you know what the cost of processing 17,000 sponsorship forms is? And getting gift aid back?” says Cathy Gilman, chief executive of Leukaemia Research. “There’s no point in them not charging fees if they can’t offer what we need next year.”

As for the worry that Kharas and Huby want to line their own pockets, that’s still to be proven. They pay themselves salaries of £150,000 and £130,000 respectively, plus profit share — high in small charity terms but not for heading a burgeoning tech business that made £2.2m profit after tax on £7.3m revenues in the UK last year. They also own 9% and 7% chunks of the business, but nobody has made money from that investment yet.

“The poor old shareholders have not had a penny in almost 10 years,” nods Kharas. And Justgiving’s principal backer, the veteran CD-rom entrepreneur Béla Hatvany, says he is happy with that. He sold his Silverplatter information business in America for $113m eight years ago, and now controls more than 50% of Justgiving, having gifted part to staff as share options. Other investors have tiny stakes.

Hatvany insists that none of them is in it for the money. “Our purpose is to unleash the giving potential of society worldwide,” he says. “I don’t want another pot of gold.”

In the end, users can decide. Kharas says she is always asked if she runs a “social enterprise”. No, she replies. “That is a very different kettle of fish.” This was about two women creating something that charities needed, and that would pay for itself. It will evolve, adds Huby. Watch this space.

Anne-Marie Huby’s working day

The Justgiving managing director wakes at her north London home at 6am and breakfasts with her family. Later she walks her five-year-old son to school and then cycles to Justgiving’s Leather Lane office, home to 45 staff.

“I focus on current operations. Zarine takes a longer-term view, especially in relation to our choice of technologies, our No1 area of spending and therefore risk,” says Anne-Marie Huby.

Her workload can involve liaising with charities, looking at better ways of serving users, and organising data thrown up by the service. Justgiving also provides technology training to smaller charities that pay £15 a month to join its scheme.

She finishes at 6pm, and often joins the team in the pub.

Zarine Kharas’s downtime

Outside Work, Justgiving’s chief executive leads a simple life.

“I meet friends, I watch films, I go to the opera and the theatre,” says Zarine Kharas.

Her preference is for foreign, subtitled art films. “Preferably films where nothing happens for a very long time. I hate violence, and horror films.”

Her taste in opera is “rather more plebby”: Verdi, preferably at the Royal Opera House. She has attended Glyndebourne, “but I don’t like the dressing up”.

Kharas is also a member of the National Theatre, and will watch most drama, but not musicals.

Otherwise she spends her money on holidays. “Greek and Roman ruins, not lying about on beaches.

I am not a great one for flowers and beauty, either.”

Vital statistics of the Justgiving founders

Zarine Kharas

Born: June 14, 1951

Marital status: single

School: Karachi Grammar, Pakistan

University: Girton College, Cambridge

First job: articled clerk at Middleton Lewis

Salary: £150,000 plus profit share

Home: Maida Vale, London

Car: “I don’t have a car. Where I live you can’t park, so there’s no point in having one.”

Book: The Golden Bowl, by Henry James

Music: Nina Simone

Film: Casablanca

Gadget: boiled-egg cracker

Last holiday: Syria

Anne-Marie Huby

Born: November 17, 1966

Marital status: married with one son, one stepdaughter

School: Athénée Royal de Malmedy, Belgium

University: Institut des Hautes Etudes des Communications Sociales, Brussels

First job: radio journalist at RTBF

Salary: £130,000 plus profit share

Home: Islington, London

Car: 11-year-old Honda

Book: Belle du Seigneur

Music: Northern soul and Mahler

Film: A Matter of Life and Death

Last holiday: Lake District