Companies try out micro-donations, in lieu of one big cheque

A Calgary startup hopes to revolutionize how corporations and everyday people give to charity.

Goodpinlaunched this summer as a way for companies to receive more recognition for their donations and for people to receive gifts for their donation, no matter how small the amount.

The mobile app is still in its infancy, but the companyhopes partnering with a major American retailer can provide a big boost for its mobile charitable giving app.

"We are in talks with a very large retailer in the U.S. that is giving away $4 million a week to charity as part of what they do. That's $208 million a year," said Goodpin CEO Jay Baydala."They are leveraging our platform to give that to their customers to be able to give that to their charity of choice."

Baydalasaid he can't name the company, but it's a top 10retailer south of the border.So far, Goodpin has launched in Calgary and wants to expand city by city across Canada and the U.S.

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With several other micro-donation apps launching, there is plenty of competition.

"It's a pretty exciting time, but also a pretty nerve-wracking time because now that we're out there, it's a race to get the network," said Baydala.

If a large number of companies allow their customers to decide where donations are spent, thatcould have a dramatic impact on the amount of money charities collect, for better and for worse.

How it works

The app alerts people to offers from nearby businesses. For example, in Calgary you may receive a notification that you are close to a Monogram Coffee location and the cafe willgive money to your charity. You then have the option of directing $20 to a charity of your choice, or add at least $3 of your own money and get a free coffee. You decide.

Multiple motivations are at play.

Instead of giving a lump sum to a charity, the company is letting its customers decide who benefits. The business receives positive recognition with each person who sees the offer.

User can divert the money to a charity near and dear to their heart, regardless of whether they contribute their own money. If they do make a donation, its easy to do and there's often a reward such as coffee or lunch.

"We are all about donor choice," said Kate Bahen, with Charity Intelligence Canada, an organization which analyses the performance of charities."Typically when you go to a business when you are shopping, you are asked 'would you donate to this charity?' that's the charity the business has already chosen."

Goodpinreceives some financial benefit.Brands are also asked to pay a fee to use the system. In addition,there are transaction fees and an optional tip.

Impact on charities

Allowing customersto choose which charity receives a company's donation could impact the charitable giving landscape. Businesses may find out they can receive much more attention this way.

"Especially among millennials," said James Stauch, with Mount Royal University's institute for community prosperity. "Companies that seem to be socially driven, socially minded, socially aware are seeing an impact on their bottom line because people are aligning their values, their social values, with companies that are seen to have some kind of moral compass.

Mobile giving is seen as the future for charitable giving, especially as some traditional fundraising events like golf tournaments and walksaren't as popular as they once were.

If customers are choosing the charity, there may be an impact on how many donations anorganization will receive, especially those that relyon the big cheques given every year.

"The individual consumer might say 'you know what, I'm actually interested in human rights, or I'm interested in the environment, and protecting the environment, or I'm interested in arts, maybe independent theatre' for example, which a big company,may not touch that often."

Is $5 worth it?

The success of Goodpinand other micro-donation appsis hinged on many factors including whether people believe their donations, however small, will reach the right hands and make a difference.

"I think people are still questioning how far five dollars goes," said David Hartwick, the person behindFive Buck Fridays, a promotion suggesting people forego their latte or cut back on their lunch bill once a week and give the balance to charity.

"Five dollars can change the world. If we all do it, just think of the impact," he said.

People are always urged to research the organizations they are giving money to as a way to ensure it is spent efficiently and effectively.