The next wave of innovation in charitable giving?

Some years ago when I took part in a group of very smart people whose job it was to think about technology and charities we had a mantra: tech was about improving the broader relationship with a charity’s supporters, not just the transaction, which at the time was personified by the rush for ‘click to give’ type buttons on websites. We thought – largely correctly, I reckon – that sites/platforms that strengthened the entire relationship would be the most innovative. And as one of the judges on NESTA’s Innovation in Giving, I’ve seen some fantastic such sites.

But were we wrong? Is the area where there is most scope for innovation the actual transaction – the bit where you hand over the money, rather than the many new giving sites/platforms, some of which might collectively be better-termed Innovation in Marketing?

I should begin by saying that, as ever, Lucy Bernholz was the first to spot this trend and its implications for nonprofits in her post, How Square Changes Everything. My thinking was spurred by Lucy and sharpened by a sense that lots of good ideas for digital giving out there share some serious challenges in terms of building the ‘back end’ – and that if only someone would come along and provide it. After all, how many times have we got to the point of buying – or giving – over the web and changed our mind at the thought of entering our credit card details (not to mention our address and that fiddly verified password)?

There are many, many startups out there vying to be the payment system of the web and, increasingly, the mobile web. Some you will have heard of, others you might not. Google wants you to use your smartphone as a mobile wallet, based on a technology called Near Field Communication. And there has of course been a lot of interest in giving using SMS and Twitter (such as via Givey).

But numerous, fashionable startups such as Square, Stripe, iZettle and mPowa are aiming to disrupt the payments market dominated by PayPal and significantly they aim to make it much easier for small organisations to take payments. And most charities are in this category. All you need to trade is a smartphone (and in the picture above, a dongle to take payments at the point of sale/donation). Not all are operating in the UK – but they almost certainly soon will be. Just as the web and social media made organising without organisations ridiculously easy, it would seem these new startups are making payment, particularly via mobile, similarly easy. And all of these mechanisms are generating data. Potentially Big Data  (though as Paul de Gregorio shows, we might not always understand it!).

Not all are convinced – indeed, many are sceptical – yet there is clearly a trend worth following here. Consider this: 39% of adults own a smartphone, compared to 27% last year. 57% of smartphone users are using their phone to help them shop. Services such as JustGiving are already seeing an uptick in the usage of mobiles to give.

To paraphrase Lucy Bernholz – if you havent yet used your mobile to give to charity, you soon will do. The question for charities might be: would you be ready for when we do?

(If you like this blog, it’s partly taken from our forthcoming NCVO members’ publication: The Road Ahead? – A review of the voluntary sector’s operating environment 2012)