Donating to the homeless with a credit card

This scenario - using plastic (or soon, the NFC chip in your phone) to help out a homeless person - is the standard thought experiment when talking about mobile payments, a cashless society, and charity.

So, it comes to pass today in none other than Harvard Square - where a startup called Leaf and the Harvard Square Business Association  - are partnering to make credit card donations to the homeless possible, using a tablet system installed at local stores.

Here's how the groups are describing it:

"Leaf tablets will be available in many Harvard Square businesses including Black Ink, Brattle Square Florist, Concepts, Curious George, Market in the Square, Tistik and The Tannery, enabling patrons to donate with the swipe of a credit card. HSBA will work directly with local charities including Youth on Fire, Harvard Square Meals Program, On The Rise, Bread and Jams’ Self Advocacy Center, CASPAR, Spare Change and The Harvard Square Homeless Shelter to ensure that the money is put to good use. Donors can select the amount they wish to give – starting at one dollar – and will know exactly how their money will be spent. For example:

• $1 can provide a pair of socks
• $5 can provide three hot meals
• $10 can provide one onsite medical visit
• $20 can provide one meeting with a counselor
• $50 can provide a living wage (3.5 hours of paid work)
• $100 can provide shelter for a week"

It appears that the donations go to local organizations serving the homeless, not directly to the homeless. In that regard, it's not that different from any other version of "embedded giving," except that it's a lot more local. Because specific dollar amounts are correlated with specific "provisions" (See list above) the groups talk about it as if this offers donors more assurance about where there money is going. It doesn't really, it just feels that way - you don't know your $1 bought a pair of socks, all you really know is that a pair of socks costs a $1.

The Leaf model is interesting, sort of. If donors get receipts from the nonprofits, some actual follow up that their dollar really went to the organizations as stated, then this is a (small) step up from where embedded giving has been. To date, embedded giving of "a nickel donation for using your own grocery bag" variety have relied not on the donors wanting more assurance about their gift but on the ease and "guilt" of the transaction. There is no mechanism for checking that the companies for whom the check-out teller works actually donate those nickels to anybody. How and why anyone has ever believed that stores are setting aside all those nickels and making donations to the organizations that they claim to be supporting is the biggest mystery to me.  Why would anyone think it is more efficient or trustworthy than giving a nickel directly to someone who needs it or directly to a nonprofit organization, skipping the grocery store middleman? This kind of cash-register giving is designed to be opaque, and little has been done to change that.

The thing about mobile payments and credit cards is that they make the "paper trail" of follow up easier - it's all digital data that can be tracked. If someone "re-builds" embedded giving so that the digital data trail is visible, and donors who care can "follow their money," well, then, fine. Making the transaction itself a "swipe" instead of a "drop" in a cup but not doing anything about trust, transparency or follow-up, well that's not really interesting, is it?

The version that Leaf and HSBA are modeling has potential to be interesting in another way - it's super local. The folks in Harvard Square - merchants, shoppers, homeless people, and service agencies - know each other. They recognize each other. They can do more than just give money, they can look out for each other, care about each other, pay attention over time. Don't laugh - this happens in much larger communities than Harvard Square (NYC, for example). If technology serves here as a bit of a trojan horse to help tighten those bonds of people caring for people, that would be great. It might even help some of the folks without homes get back on their feet.

As it stands, the Leaf/HSBA model appears to have that potential, as well as the potential for the digital follow up.  It will be interesting to see if anything comes from that opportunity.