03/13/2013 12:37 pm ET Updated May 13, 2013

Give While You Live with the Help of Technology

As society and technology have evolved, it has become easier than ever for consumers to be charitable by integrating their regular spending activity with technology that helps them contribute to causes they believe in.

  • There are many ways in which technology has been modified to capture charity donations during transactions that are already occuring:
  • credit cards that donate a percentage of all purchases to causes of the cardholder's choice
  • grocery store checkouts
  • browser plugins
  • ATM machines that donate every time you withdraw

Technology is being built to help people give while they live, and as the founder of one such organization, Charity ATM™, I have learned a lot about how technology can be altered to streamline giving. The continued evolution of charity technology could have even more social impact in the future, specifically when it comes to the class of supplemental inventions that enhance and add to breakthrough technology: the microprocessor, computers, the Internet and programming languages.

Giving While Getting

Using a modification to existing ATM transaction software, and changing the consumer messaging around the withdrawal process, we at Charity ATM™, transformed the everyday transaction of taking out cash into the ability to easily donate to local school or food programs of the user's choice. When someone chooses to use a Charity ATM™ machine for a transaction they were already going to do (withdraw cash), the donation occurs automatically. Most consumers are used to a small transaction fee when withdrawing money from an ATM that is not their home bank's. Instead of this transaction fee profiting the bank that owns the ATM, in the case of Charity ATM™, the fee is donated straight to a local charity. The consumer's experience is the same as any other ATM transaction; the outcome is that a charity donation is made in lieu of a bank profit.

By structuring the technology this way, the consumer simply completes their transaction, and at the same time, does something good. The key is to pair technologies with business models that have very high margins. Because financial impact is perhaps the strongest determining driver on social impact, technologies that are able to increase the flow of cash into society can naturally be considered to be some of the most influential.

When I was first conspiring to launch Charity ATM™ in 2008, I looked at the ATM industry and saw that the average ATM fee was $1.78. (1) The national average is now up to $22--and can sometimes be as high as $3 to $4. Because the actual cost to the ATM processor is so low, there is significant room for a charitable donation. According to the US Treasury Department's Office of Thrift Supervision, the cost to a bank for an average ATM transaction is $0.27. That includes the amortization of the machine itself, the telecommunications cost, and the salaries of the people who oversee the system.

Doing a little bit of math, this means that for every $3 that is paid by the consumer, $2.73 is pure profit to the bank. There are over eighty billion ATM withdrawals in the US every year(3), and this number is growing. Not all transactions incur a surcharge fee--for instance when customers use their own bank's ATMs--however, for the sake of this example and to evaluate the impact this charitable technology could potentially have, even if only 20 percent of the total transactions resulted in surcharge fees, and those fees gave one dollar of profit from each transaction to charitable causes each year, it would raise 16 billion dollars. The social impact of that amount of money in a city like Boston or in a country like India would be astonishing. This large-scale vision of possible social impact is what the power of technology holds.

Giving While Spending

A similar technology is the innovation of credit cards to track and donate automatically during consumer use. Through software technology, and with consumer permission, a percentage of every transaction placed on a credit card can be calculated and paid to charitable causes. Working Assets is a great example of this technology-in-use. This progressive company has donated $67 million dollars to non-profit groups since 1985.(4) This extent of social impact has affected civil rights, economic and social justice, environmental change, peace and international freedom, and voting rights and civic participation. The invention of this specific technology allowed a consumer to help cure AIDS while buying a toothbrush.

Working Assets, which originally based their model on charges for long-distance phone service, eventually branched out to include mobile phone use with their Credo Mobile arm. Last year, Credo Mobile raised over two million dollars for charity.5 They have also applied this same model to gift cards--they found the already-occurring technological transaction and attached a component to it that allows for charitable giving. They have not made the consumer change their habits in any way other than to choose to use this service (versus a competitor's) in the first place.

Giving While Browsing.

Global Mojo (6), based in San Francisco, has developed a browser plugin technology that tracks user activity and, through a series of pre-negotiated contracts, allows users to raise money for charities of their choice as they conduct their transactions. This hands off, easy-to-install piece of code raises money with little to no interaction required from the donor once it's set up.

Global Mojo is small and has started out with just six-thousand users. While the company has stated that each user will generate between $10-15 per year (7), this could become significant if the almost seven billion people currently using the Internet (8) eventually adopt this service. If 25 percent of Internet users install and run Global Mojo, it could generate $26 billion per year. Similar to the ATM model mentioned above, this technology has huge potential to generate massive social impact if it continues to grow and permeate the enormous user base available to it.

The Power of the Internet to Make a Difference

The groundbreaking technology of the Internet has the ability to make a huge difference. More than any technology before it, the numbers of people it can reach, and the societies it can involve around the world, is massive. If adopted by the leading nations, these technologies could trickle down into global culture and result in an impact that would dwarf even the most aggressive estimates. As I write this, North America continues to hold the highest level of Internet permeation into society. It is countered on the other side of the world by Africa, with an average permeation rate of 30.2 percent.

The website is doing something tangible with their technology: they host a fun trivia-type game on their site and donate ten grains of rice to the World Food Programme for every correct answer by a site visitor. To date, they have contributed 91 billion grains of rice. If there are an average of 29,000 grains of white rice in a pound (9), and one pound of rice feeds four people three meals a day, this website's fundraising should be sufficient to feed 12 million people three times a day, or something like that.

There are other click-to-play and click-to-donate websites popping up across the Internet every day that use this model of collecting advertising revenue from user interactions to purchase food and donate to causes. Aside from fundraising, websites are also allowing people to distribute software that helps to utilize the global user base of processing power to solve complex research problems and find solutions for disease. A software project at UC Berkeley, called Boinc(10), runs complex equations and effectively solves societal issues using the collective users' computers as processors.

The Retail Space

The ease of giving and helping social impact in a positive way has also been made in the retail consumer space. Many retailers have developed or adopted technology that enables them to collect charitable donations via keypads at checkout. If you've ever been asked by the person checking you out at Whole Foods if you'd like to make a flat donation to charity, this is why. Generally, a small amount is easy for a customer to handle, and the greater pool of donations slowly grows.

Opponents of this type of charitable transaction argue, however, that the disconnect of the non-profit from the donor actually leads to less money raised.(11) Often, the donor who is willing to give a thirty-nine cent roundup would be just as willing to give five dollars if an advocate from the charity was appealing to them directly. This calls for a technology which would enable charities themselves to know who donated and be able to contact them directly.

And while all of this technical innovation toward charitable donation is a positive thing, it also should be noted that the ease of using this kind of technology can encourage a hands-off, laissez-faire approach to charitable giving versus real, hands-on social impact. While small consumer electronic donations do add up, some consumers use their participation as an excuse not to do more. In addition to these passive methods that are available on the Internet, there are also active and involved ways in which a consumer can use the Internet and the technology built on top of it to make social impact.

Just the Beginning

All of these technological solutions to giving are just the beginning. As we continue to evolve and create new payment methods and gateways, we will continue to create new technology which will allow users to donate both passively and actively--and make a social impact while they go about their everyday lives.

I believe that as people become busier and busier, with the advent of instant technologies, the more this integrated form of social impact can be built in, the better. We will find that huge amounts of good can come from very little input by collective masses of individuals. If we can feed millions of people by playing a game online for rice, image what we could do if the right people and corporations got behind a true movement to give a small percentage of all profits in various technologies to charity.

It is easier than ever for consumers to give, and easier than ever for businesses to help make that a possibility.

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