Rounding Up for Nonprofits: New Technologies and Habits Create Everyday Donors
Most nonprofits recognize that the Holy Grail of giving is connecting with the “everyday donor.”
These donors take advantage of monthly recurring donation programs, or have a way to steadily give throughout the course of their everyday lives. The value of a donor who gives $20 per month, each month, is more appealing than waiting anxiously for the single $240 check once per year.
Monthly, programmatic donations work for both the nonprofits and the donors. For the nonprofits, they generate a steady and reliable flow of dollars for the organization. For the donors, this monthly engagement emotionally and morally brings them closer to feeling like they are part of the mission in their everyday lives.
However, nonprofits need to overcome the hurdle of convincing a donor to commit to a monthly spend. Sometimes the ask of $20 a month feels like it’s too much.
“Even though donating does have this positive feeling associated with it, they call that ‘warm glow,’ it is a financial loss to consumers, and financial losses are painful,” Katie Kelting, associate professor at St. Louis University, told Marketplace.
But 84% of millennials give to charities, and they and Generation Zers are looking for mobile-first and technology-driven experiences that make it easy to contribute to causes they support. They want to give, it’s just a question of how they best do it.
It seems like it is a time when the perfect combination of major demographic and technological trends can help nonprofits engage in an everyday way with their donor base.
One method that has emerged in apps, websites and retail experiences is to round up a purchase to the next $1, sending that “spare change” to a nonprofit.
Then: Spare Change Cash Donations
The rounding up of spare change isn’t new. It was just done in an outdated way.
In the way-back machine, this might have been a small plastic box next to the cash register, an orange box carried around during Halloween, or a big red kettle ball with someone asking for spare change. For older demographics, this was a seasonal and commonplace sight in grocery stores or during the holidays.
In fact, nonprofits, such as the Ronald McDonald House, collect millions of dollars in spare change donations annually, so it can be extremely valuable to be present in those purchasing moments. But now with only 13% of Americans using cash for purchases, those spare quarters, dimes, nickels and pennies are few and far between.
So, while rounding up is something we all understand, the habit was waiting for technology.
Now: Digital Round Up Donations
Because almost nine out of 10 purchases are done digitally (Apple Pay, debit card, etc.), the programmatic approach to add the extra bit to round up to the next $1 makes it easier than ever for consumers to give with each purchase. It can move to a place of precedence and the commonplace for those donors looking to authentically engage in an everyday way with a nonprofit.
More and more retail consumer experiences help donors easily contribute during their natural purchase actions.
- Lyft enables customers to round up purchases through its Lyft Up program, giving extra on each ride.
- PetSmart asks customers to donate $1, $5, etc. to support shelters upon checkout.
- Von’s connected with San Diego Food Bank to add $1, $5 or $20 to grocery transactions.
New fintech applications are enabling a seamless way for consumers to contribute in their habitual, everyday purchasing action. These are set-it-and-forget-it kinds of methods that make it easy to give.
Coin Up. Co-founded by Leena Gupta, Coin Up automatically rounds up each purchase on a debit or credit card and sends that extra amount to the donor-selected nonprofit.
“We were looking for a way to help everyone become an impactful donor in a small, everyday way,” Gupta said. “I think most people want to be a part of something bigger, and it became our mission to be a catalyst for democratized giving. Plus, we can help nonprofits more effectively engage with their donor base and create recurring revenue with innovative technology.”
RoundUp App. Another app that allows purchasers to connect to their nonprofit of choice, RoundUp App helps nonprofits engage their donor base.
TipTap. This technology solution replaces the plastic boxes next to the register with an NFC-enabled wireless receiver for an instant contactless donation. Each unit displays a set donation amount and charity, and accepts donations via contactless credit cards and mobile wallets.
Wells Fargo and Zelle. Wells Fargo made it easy and app-like to use Zelle to instantly transfer funds to a nonprofit, like the American Red Cross.
These approaches are becoming more commonplace and tap into the burgeoning behavior and technological trends of younger donors having a frictionless way for automatic, small, mobile-driven, everyday giving.
And, brands and businesses are looking to partner with nonprofits. Generation Z is becoming a stronger consumer force, and younger consumers want to buy from brands that align with their values and causes. It’s the perfect time for nonprofits to make those partnerships and become part of the everyday donor movement.