Diversity of income streams may well be a big theme in giving, but does the amount given matter as much as the method? Alison Hutchinson ruminates over whether micro-donations are the new giving channel
The well-known saying ‘look after the pennies and the pounds will look after themselves’, couldn’t be truer than during today’s tempestuous economic climate. As the rocky times ahead dominate headlines and the British public continue to tighten their belts, we are all looking for innovative ways to keep raising funds for overstretched charities.
Micro-donations are one such way. A new buzzword in the third sector, they are simply donations that are small in amount. In the past they have been collected by charity boxes and tins on shop counters. People topped them up with their change when they used cash to pay for shopping. The Pennies Foundation has created an electronic charity box called Pennies, which makes micro-donation a digital tool to suit the way we pay for goods and services in the twenty-first century. Our recent research showed that more than half of those asked reported that they see charity boxes less or barely notice them at all. Moreover, debit card payments overtook cash as the payment method of choice in 2010 with £26bn more spent on cards than was spent in notes and coins. By enabling small, electronic, ad hoc donations, charities can harness the increasing popularity of card payment, as well as the increased use of our mobile phones and the internet for shopping. So, could 2012 be the year that this new fundraising avenue really takes off?
We hope so and it seems that the public do as well. Pennies gives consumers the option to round their card purchases up by a few pence and, with one touch of a button, give this change straight to charity. The scheme recently marked its first birthday by reaching its one-millionth donation. These donations came from customers of the first five retailers who adopted Pennies in their first year. Last month participating retailer, The Entertainer, stated that half of its customers who could donate in this way did.
Pennies is very much in its infancy, but the early indicators all point towards the public embracing the concept and those five retailers have already been joined by a number of others signing up to Pennies.
Hopefully these developments will lead to many more millions of donations being made.
The capacity to give in this way is incredible. If all of the 43 million card users in the UK gave once a month at an average of 30p per month, over £150m would be raised for UK charities every year.
Multi-channel giving
Key to the growth of this movement is making implementation easy for retailers and giving compelling for consumers. A one click process that’s quick and private with no staff interaction has been key to the scheme’s success, as has the affordability of a micro-donation. Consumers are never asked for more than 99p. And it’s a choice at the checkout not an on-going commitment. All the money goes to charity with retailers nominating the charities they want to support for the majority of donations they collect. The remaining charities cover a broad range of causes designed to appeal to a mass audience.
Another crucial element to the success of micro-donations is accessibility. The way we shop is evolving, and in order to harness that dynamic, Pennies is already multi-channel. Whether you are shopping in your local corner shop, ordering pizza online or even making purchases via your mobile, the aim of Pennies is to give people the opportunity to donate their spare change to charity.
Online shopping has seen a massive boost in recent years, and with the introduction of smartphones a similar increase in the m-commerce world is to be expected. Recent research conducted by the Internet Advertising Bureau found that within the last year, there has been a ten per cent increase in the number of UK mobile users who have used their smartphones to research a purchasing decision or make a purchase. The same study concluded that m-commerce would be the only retail channel capable of double digit growth. With that in mind it seems to be the perfect time for charities to capitalise on the growing mobile industry for fundraising.
Technology has been an important area in Pennies’ success to date. We continue to strive for new ways to implement electronic micro-donations for the masses in 2012. Our first mobile partner is Mobile Money Network (MMN) who launched their new mobile app Simply Tap in November 2011, which has Pennies built in to it.
Simply Tap is an innovation that only requires a customer to go through a one-off registration process to securely capture information such as preferred card details and delivery address. Customers can then use the Simply Tap instant checkout service on their mobile phones to order products they see anywhere by tapping a code into their mobile phone. Customers can buy in-store, online and via advertising campaigns. Simply Tap already has a number of key retailers signed up, including Thorntons, Goldsmiths and Carphone Warehouse.
This new software integration will make it easy for merchants to offer their customers Pennies. Consumers using Simply Tap to purchase via their mobile phones just need to tap once more and their payment is automatically topped up by a few pennies which go to charity.
We are not alone in the aim to capture that elusive small change for charities. Worldwide a number of similar schemes are arising. For example in the US, Change Round Up, allows online shoppers to round up their purchases for chosen charities. BirdLife International also recently teamed up with the mobile app game Angry Birds to launch a new fundraising game and Just Text Giving, Vodafone’s new charitable texting service allows a wide array of charities to fundraise through text messaging.
Going local
Pennies doesn’t just work with large national charities, our aim is that charities of all sizes, national and regional can benefit from this innovation in giving. Wallace and Gromit’s Grand Appeal which fundraises on behalf of Bristol Children’s Hospital, is one of four charities nominated by The Entertainer. Despite dividing the majority share of The Entertainer’s donations four ways the popular, local charity is already seeing big figures come through, and the January sales look set to give them a further boost. Nicola Masters, director at the Grand Appeal said: “It is a great way to raise money as it encourages lots of people to donate smaller amounts that they can afford. Those donations are already adding up, proving that every penny counts for charity and will go a long way to helping young patients at Bristol Children’s Hospital.”
We also understand that small charities often don’t have the influence or resources to land a large corporate partnership, but may have very close ties to smaller independent chains and shops. With that in mind, Pennies is already working to enable smaller organisations to benefit local charities. At the end of last year Pennies launched a community initiative with Cardsave, the Grimsby-based provider of point of sale card processing solutions for small to medium-sized businesses.
More than 100 small retailers in Grimsby and Cleethorpes now have Pennies functionality on their chip and PIN machines, enabling their customers to donate 25p when they shop or eat out to nearby St Andrew’s Hospice and other local charities. Jane Whenham-White, head of fundraising and marketing, St Andrew’s Hospice, commented: “Geographically we often feel quite isolated and forgotten in North East Lincolnshire so this is great news for us and for the local people who can support the Hospice in this way. Fundraising is always a huge challenge, but the current economic environment in which we are working is making it doubly difficult. The Pennies micro-donation concept is great for facilitating lots of small donations from lots of people and ultimately making a big contribution to pay for the care of local people.”
Over time, this way of working with small retailers could enable more than 50,000 Cardsave merchants across the UK to join the Pennies movement and raise funds for local charities. Our hope is that this initiative can be replicated across the UK, encouraging more and more retailers to become part of the Pennies movement during 2012.
The joy of micro-donations is that they sit happily alongside other more established fundraising channels, with only 17 per cent of those surveyed making regular donations compared to 67 per cent either already giving on an ad hoc basis or giving donations through a combination of both regular and ad hoc. Electronic micro-donation is also popular with the hard to reach under-34 year olds, with 72 per cent of this group saying they would like to donate in this way. According to the Office of National Statistics they represent 28.5 per cent of the adult population.
And some charities are already seeing large figures come through. Domino’s Pizza was the first retailer to adopt the Pennies scheme in November 2010 and in the space of one year its nominated charity Special Olympics GB (Northern Ireland customers donate to Northern Ireland Children’s Hospice) had received nearly £130,000, with the amounts donated each month remaining steady. Proof of the power of small donations is already emerging with examples like this one, and 2012 looks set to offer opportunities for many more charities to benefit in a similar fashion.
Pennies, is currently available with a number of other major retailers including Travelodge, Zizzi Restaurants and GO Outdoors. 1.4 million consumer donations, have been made since the launch in November 2010 raising over £350,000 and that’s just a start.
Electronic micro-donations are a new and affordable way for everyone to give a little should they choose to do so. Without the overhead costs of regular charity boxes, electronic micro-donations can be of particular help to smaller charities who normally would not have the man power to utilise the public’s spare change.
Alison Hutchinson is chief executive of The Pennies Foundation
This article first appeared in The Fundraiser magazine, Issue 13, January 2012
