Sunday, December 13, 2009

Innovations in Embedded Giving...and an Idea about Ideas

Once upon a time I thought my writing about #embeddedgiving would come to an end. Ah, youth. So long as its proponents keep on pushing it, I guess I'll keep being asked about it.

The most recent inquiries, however, have actually led to some really interesting conversations. For example, this post on "unbundling embedded giving" was prompted by two efforts to disconnect shopping from charitable contributions. To literally promote the latter at the expense of the former. A story also ran on Sunday in The New York Times on the WhatIDidNotBuy site. In response to the NYT story, I received the following email (I don't know the sender):

"Ms. Bernholz,
I read your name in an article on the New York Times web site which discussed the site: This article plus another article about gift cards and the millions of unspent dollars left in partially used cards gave me the idea that charities ought to be able to tap that source of money. If gift cards came with an option to allow the holders to send the left-overs to a charity, I think lots of people would take that option rather than give the money back to the retailer.

According to Ron Lieber's article in the NYT, nearly five billion dollars of gift card money will go unspent this year. That money reverts to the retailers. When someone gets a card worth $100 and uses it to purchase an item worth $95 dollars, then the left-over money most likely will languish for a time then eventually revert to the retailer or the issuer of the card. If there were a quick and easy way to donate the left-over money, then card users might do that rather than give it to the store. I know I would gladly do that. I currently have a gift card from The North Face. I used a portion of the value to purchase a jacket. What to do with the remaining amount of money (15 to 20 dollars) is hard to imagine as there is nothing in the North Face store at that price. So I would love to see that money go to a good cause.

I'm sure the retailers and banks would strenuously resist such a change but I'll bet there would be lots of support from other quarters.

Sincerely yours,

Tom Ormond"

This is an interesting idea. Theoretically, the leftover amount on the cards could be tracked and added up - which would possibly address one of my biggest issues with embedded giving - that we don't know how much money goes to charity. As Tom notes, the idea will surely have its detractors. OK - let's here from them - and from those of you who like the idea and can push it a little bit further, refine it, improve it and point out other ways it might work. (Please comment below, tweet about it to @p2173 or email me). Tom's idea reminds me of an effort in the Bay Area, where leftover BART tickets each with a nickel or dime left on them ("Tiny Tickets") can be donated through the East Bay Community Foundation to nonprofits in Alameda and Contra Costa Counties. An example of seeing treasure in trash.

I love that Tom saw an opportunity for innovation by thinking across two domains. I appreciate that he shared the idea with me and then gave me the go-ahead to post the idea here for all of you to consider. I am proud of the fact that several ideas first floated on this blog are now moving ahead: including the Project on Policy in the Social Economy, the Peer-Review for Nonprofits,* and the Impact Investing Index. Each one of those was a half-baked idea that received a certain amount of interest or direct expressions of support or collaboration and are now moving forward in one way or another. Without intending it to do so, this blog has begun to serve like a Kickstarter for philanthropic ideas (without offering any money - smile).

I am even more excited to present Tom's suggestion here, since it wasn't my idea. Wouldn't it be cool if there was a place we could share, vet, improve, and co-develop ideas for improving giving and nonprofits right out in the open? An Innocentive-esque site or wiki or whatever? Sort of like an ongoing Great American Hack-a-Thon for Good. With real innovation brainstorming meetings happening every now and then. Now that would be "working wikily." So there you have it - another idea to consider. Or make happen....

*Listen in on San Francisco public radio KALW 91.7 at 7 pm Monday Dec 14 or streaming at CityVisions Radio for a discussion with Stacy Palmer of The Chronicle of Philanthropy, Rob Reich of Stanford (Author of "Anything Goes: Approval of Nonprofit Status by the IRS") and me, talking about the number of nonprofits, the peer-review proposal, and other issues in philanthropy.


Lucy Bernholz said...

Thanks to Twitter for pointing out that states are also trying to grab the leftovers from gift cards:

From @Tammysun
@p2173 Good idea. Cash strapped states are also trying to grab left over gift card $$.

sky said...

I saw a company already does this.

You can choose to donate your gift card balance directly to local schools, or through their partners ( I think), to almost any nonprofit.

Very cool.... said...

Plastic Jungle is dealing with this by allowing you to buy and sell unused cards, including directing them to charity -

Lucy Bernholz said...

Aha! Why I love the wisdom of crowds - there you have it Tom, it's a good idea and it's happening already. Thanks folks!

Ed said...

Hi Lucy -

Thought about this for years, ever since we started penny havests for young kids to teach/do giving, and then collecting spare coins & bills from tourists coming back from abroad with collections going to charity. So there are precedent and systems around as models -- and these are only two examples.

There'll be a fight over who owns the money on the cards, analogous to political battles in some states over "bottle bills" and who gets the nickel deposit when bottles are returned (New York has been a horror show -- for more than a decade -- even though the proceeds were to go to the homeless.)

The systems should be vastly easier now. Netflix's return procedures, e.g., would seem easily adaptable and a great corporate social responsibility move. Or reverse engineering PayPal if all gift cards get registered.

Perhaps a small percentage could be held back for self-monitoring of the sector.

This is a wonderful idea waiting to happen -- and a great project for a Net Impact chapter or (nudge, nudge) even a Harvard Business School alumni chapter. I'm available to help.

Thanks for posting ideas like this.

Anonymous said...

Picking up on your comment over on my blog re: groundcrew ... are you looking for a crowd to not only discuss the idea, but also build it?

Maybe facilitating an ongoing discussion on a wiki -- and see what happens. Takes a lot of time to facilitate ...

Enjoyed the radio program tonight. Was going to phone in - but the host did a good job of asking great questions.

Brandon said...

I appreciate your thinking on the matter, we need more people thinking about solutions. Your idea has some merit and I applaud you putting it in this open forum. The problem is getting the retailers to play along, other than pr there is not enough incentive for them give away that money. Because money is often left on cards profit margins on sales of gift cards is often higher than regular sales. The challenge is developing a system that can be win win win for all parties involved; the retailer, the customer, and the charities. My company is working to solve challenges like this one, we have just started and will be launching a blog soon but for now you can follow us on twitter @mountsunmusic. Keep thinking and keep spreading your ideas.

Mountain Sun Music Group