Buzzword #6 - Embedded Giving

"What if every major event or financial transaction had philanthropy built-in?" That question was raised back in June by Matt over on xigi.net. It gave rise to the creation of our sixth buzzword of 2007 - embedded giving.

Embedded giving is the (apparently) increasingly common practice of building a philanthropic gift into another, unrelated, financial transaction. For example, rounding up your phone bill to make a gift to charity. Or using your own grocery bag and donating the nickel that the store gives you to a local homeless shelter. Or using a specific search engine because it donates a small portion of its advertising revenue to charity. Or mistaking that line on your credit card receipt for the place to calculate the tip, only to discover you've just made a gift to fight childhood hunger. Or adding $1 to your drug store, grocery store, gas station purchase to fight juvenile diabetes, MS, or any other number of diseases.

But here's the thing about embedded giving. No one is counting it. Some of the corporations that sponsor these opportunities count the gifts in their total charitable giving. Others count it as part of their marketing budgets. There's no consistency and no breakout of numbers, so we really don't know how much money is raised this way, for what, and by whom.

Embedded giving is all about making the giving easy for individuals. This ease also makes it painless - another dollar here, a few cents here. Few individuals can even remember what they donate to in this way; and no one reports it.

So what happens if we make giving so easy we forget about it? And if we actually "embedded giving" into every transaction, isn't that another way of making something a tax? After all, the folks who sell E-Z passes and other toll passes to motorists know full well that making it easier and faster to get through the toll booth, also makes it easier and faster to increase the toll rates.

6 comments:

xb blog said...

forgetfulness can be a good thing; it is just like breathing. if giving were like breathing rather than a financial transaction where you count the cost, what would be the loss? just a sunday morning thought.

Cat Laine said...

One of the reasons the current presentation of "embedded giving" data is so haphazard is probably because the practice is so new. Eventually, companies will figure out a way to print their giving numbers on your receipts, flash them on LED displays, have a running ticker on their website. Folks in frequent buyer programs will get their personal year totals in a xmas mailing.

The practice could mature so that the choice of charity by the company is more an extension of the brand. So Nike would give to "Right to Play" or "Nothing but Nets", Coppertone would give to melanoma research, Dell would go for bridging the digital divide.

Sam Davis said...

Every purchase does in the form of involuntary charitable giving through sales and other taxes.

Syed Yunus said...

Are you kidding? do you think its something new? it has been there since ages, though the mode of production were different. take orchards in India as example, in my village special trees for the travellers and passerby were planted at the boundry line of each orchard, so that they can taste it and people who are outsiders have something to stay on if they dont have anything to eat. Coining new terms is not innovation.

Dan Durazo said...

I like embedded giving because it provides a steady stream of revenue for non-profits. The key to successful embedded philanthropy seems to be transparency in the accounting. For some reason, too many organizations seem terrified to provide any level of accountability. This horrible lack of judgment needs to be corrected immediately in order to make these programs sustainable.

Dan Durazo
http://dandurazo.wordpress.com/

Connect To Charity said...

2011 presents many challenges for nonprofits. Today, nonprofits face a reduction in grants; an economy that is stretching their nonprofit dollars to the max; an increase in demand for their services; all while trying to reach new donors in a very competitive industry. Nonprofits are trying very hard to "get the word out about what they do for others", while growing their organization for long-term success.