March is American Red Cross month. Not a made up “Hallmark holiday,” March was first declared Red Cross month by President Franklin Roosevelt back in 1943, and it serves as a great reminder that this quintessentially American philanthropic endeavor depends on volunteers to provide donations, blood and time.
Like many other enterprises, the American Red Cross and other charitable organizations have long benefited from payments innovation. Beginning with credit card pioneers like MBNA, credit card affinity programs with charities like Make-A-Wish Foundation and the ASPCA enabled consumers to conveniently donate to their favorite charities, as a perk associated with their credit card usage.
More recently, new payment alternatives make it easier to make donations online or via mobile phones. For example, in addition to Visa, MasterCard, American Express, Discover, and the ever popular check, it is also possible to make donations to the Red Cross via Amazon Payments, directly on the Red Cross website. Another one of my favorite charities, UNICEF, accepts PayPal and Google Checkout Payments. And many charities began accepting SMS-carrier payments during the Haiti Earthquake. The text donation options were so simple, that tens of millions of donations were made within days, flooding charities with money at rates that were previously unprecedented. The Red Cross alone received over $29 million in SMS donations in 15 days, in small increments of $10 each.
Once, the province of the rich and well-heeled, a variety of innovations have also made it easy and cost effective for everyday citizens to contribute to the causes they value. Through a range of structural changes that have been enabled by the Internet , social media and open platforms, charitable giving is being transformed into a democratic and viral process.
A broad number of Internet players make it easy to give online, doing the activities consumers are doing already. eBay Giving Works makes it easy for buyers and sellers to support charities like UNICEF when using eBay. Sellers can designate from 10% – 100% of the proceeds of their sales to a charity. This has a great benefit to folks like me who could take the fair market value tax deduction when I donate the proceeds of gently used clothing items that I sell. eBay’s payment subsidiary PayPal, makes it easy for charities and individuals to use their PayPal X platform to develop still more convenient ways to donate to favorite charities.
Facebook is another player in the charity innovation space. From a wide range of Facebook apps, and tools for charities to use on their Facebook pages, Facebook also facilitates donations with Facebook Credits. Cancer Research charity Stand Up to Cancer is one cause that takes advantage of this simple tool that makes it easy for make donations of as little as $5, making charitable giving as simple as adding a “Like” button.
Facebook game maker, Zynga has gotten into charitable giving in a variety of creative ways. Last year, following the Haiti earthquake, consumers had the option to make donations to charity by “buying” digital school supplies and special Haiti plants for use in the game Farmville. Consumers got the virtual benefit of having these new digital items, while Zynga raised $1.5 million for The World Food Program to assist with Haitian relief efforts.
Mobile phone applications are playing a role in the charitable giving revolution as well. One of my favorite charitable apps is the Salvation Army’s Red Kettle, powered by Charity Dynamics. This free app enables individuals who have signed up to raise money via their Online Red Kettle program, to send messages to friends and family members to join the campaign. Innovative programs like this helped the Salvation Army to a record-breaking fundraising year in 2010, despite the recession and unemployment concerns.
Finally, Twitpay, is a start-up that is pioneering a simple payment method on Twitter, with a goal of raising money for charities. Recently funded by Google’s Eric Schmidt, TwitPay has a range of top-tier charities already participating, including Children’s Miracle Network, the Waterkeeper Alliance (Gulf oil spill), American Lung Association and many others.
The connection between charitable giving and payments innovation is clear, and has moved far beyond affinity programs and donations of airline miles. Many innovative solutions are making it easy and cost effective to solicit donations for charitable causes online, via social media and on phones, with quick and easy payment via both traditional payment cards and innovative new solutions. And ultimately, the more efficient charities get with handling marketing and payments, the more of the donation will go to the cause, and not to overhead. And that is something I think we all can agree is a great thing to celebrate this March.
Margaret is a Managing Director at Market Platform Dynamics and experienced payments industry executive with a proven track record of commercializing new technologies in small start-ups, and large multi-national corporations. Read More
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