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How Swipegood is Changing the Methods of Charitable Giving

Coming on the heels of the biggest decline in charitable giving in the past 20 years, there is a new way to “change the world every time you buy.” The company behind this claim is SwipeGood and its operating premise is simple. It allows participants to do a little bit of good each time they buy something.

Launched in November 2010, SwipeGood seeks to fill the niche of micro-payment, charitable giving. As reported by TechCruch, “Once you enroll your credit/debit card with SwipeGood, every purchase you make gets rounded up to the nearest dollar. So for a $50.50 purchase of groceries, $0.50 will be given to charity. At the end of the month, SwipeGood will send your total donation amount to the charity or cause of your choice. During its beta period, SwipeGood has seen that on average, people donate $20 per month through the service.”

This service is a combination of the Bank of America’s “Keep the Change” program and the online purchase-listing website, Blippy. SwipeGood differs in that it has a charitable focus. As far as U.S. charities are concerned, it could not come at a better time.

The Great Recession has Charities Struggling

When money is tight, one of the first areas businesses and individuals cut or drastically curtail is charitable giving. In October 2010, Associated Press reported that, “A new ranking of the nation’s 400 biggest charities shows donations dropped by 11 percent overall last year as the Great Recession ended — the worst decline in 20 years since the Chronicle of Philanthropy began keeping a tally. The Philanthropy 400 report shows such familiar names as the United Way and the Salvation Army, both based near Washington, continue to dominate the ranking, despite the 2009 declines. The survey accounts for $68.6 billion in charitable contributions.”

The report continues, “An earlier report by the Giving USA Foundation found overall charitable giving declined 3.6 percent last year. That report included giving to private foundations and to smaller charities, while the Chronicle’s survey only includes top charities raising money from the public.” Even though economists have decided that the recession is officially over, unemployment in the United States is averaging 10 percent. Those without jobs are more worried about feeding their families and less concerned about the fortunes of the ballet.

How SwipeGood Works

The company’s website http://www.swipegood.com offers a good overview of the service. In order to participate, consumers must enroll their credit card and the service will track purchases. As of November 2010, the service will only integrate with American Express but TechCrunch reports that SwipeGood “plans to allow users to add credit cards from Citibank, Chase, Wells Fargo and Bank of America in the future.”

In what would seem to be contrarian to the purpose of giving money to charity, the SwipeGood business model is a for-profit venture. In the FAQ section of the company’s website it notes, “Our goal is to make giving to charity as easy and as impactful as possible. By structuring ourselves as a for-profit business, we believe we can make a much larger impact on the world and help non-profit organizations more efficient in their fundraising efforts.”

SwipeGood makes money by taking a 5 percent fee on each monthly donation. It is projected that these fees will cover all transaction costs, overhead and other elements of the company’s sustainability.

Questions about whether participants can see their monthly transactions and how SwipeGood obtains these credit card transactions are also answered on the company’s site. It notes, “We send out monthly emails summarizing your transactions and round ups for that month. You can also see all your detailed transactional information on the SwipeGood Dashboard after you login. We get your transactional information in the way companies like Mint.com aggregate purchase information – through connections with your bank’s website.”

Charities are Changing with the Times

With the dearth of contributions, even huge non-profit organizations such as the Salvation Army are trying some high-tech tactics. The AP reports, “Last week, the Salvation Army signed its first agreement to receive donations by text message, which it will roll out this Christmas season. Text donations have risen in popularity in the past year for groups like the Red Cross, which encouraged such donations after the earthquake that devastated Haiti in January. Officials have also looked at creating avatars or online games to engage younger donors.”

There is no doubt that technology pervades every aspect of life – including charitable donations. If the SwipeGood model or the texting tactic proves to be effective in raising funds, these micro-donations can add up to real money and more charities will become tech-savvy.

SwipeGood’s mission is elegantly simple. It states: “SwipeGood is all about making change simple and effortless so more people can be part of it. Together we can solve big problems with small actions. Together we will make a big difference in the world.”

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