How does transaction effort impact giving?

In the last post, I talked about how much should people give to charity. Let’s start to examine why people do or don’t give to charity in the first place. This is a question I’m personally interested in – I’ve always believed that it’s a “good thing” to donate one’s money to causes, but I have had various degrees of success in actually doing this in practice. Usually less success than I’d like!

You could write a whole book about barriers to giving, but let’s explore just one today: transaction effort.

Transaction effort is the amount of work required to take the intention to make a donation and turn it into a donation itself. An example of low transaction effort is when you drop a few dollars in the hat at church – you don’t have to go anywhere, fill out a form, or even think much about whether to give. An example of high transaction effort, on the other hand, occurs when you send a check in response to a solicitation campaign you received in the mail – you have to read the material, write the check, stamp the envelope, etc. Anytime that potential transaction effort can be reduced, it’s more likely that a transaction will be made in the first place. That’s one reason why online donations are usually more likely to occur than offline ones.

But even within the realm of online donations, there are ways of reducing transaction effort. Let’s take a look at three companies that attempt to do exactly that: SwipeGood, GoodSearch, and SocialVest.

SwipeGood ties giving to everyday usage of your credit card. After registering your credit card, SwipeGood will round up each transaction to the next dollar, using the difference to make a donation to a charity of your choice. I signed up about a month ago, and SwipeGood tells me that I’ve donated $27.84 to Room to Read, the charity I picked. Pretty easy. But honestly, I had kind of forgotten that I had signed up, and only remembered to check while writing this post. SwipeGood only allows me to give to one charity, at a time, so if I want to change things up, I have to log back into the site and change my settings. There’s not much I get to see after I donate, either.¬†SwipeGood makes it easy to give, but I’m not sure if they make the experience much more meaningful. I could have just signed up for a recurring donation on Room to Read’s site, and accomplished very much the same thing.

GoodSearch follows a similar principle, but instead of giving through transactions, you give through searching. By using their site, or a search toolbar installed into your browser, the site makes donations to a charity of your choice. Search sites generally make money from sponsored search results; GoodSearch follows this model, but simply donates some of its revenue. I haven’t really used GoodSearch; I don’t want to have to go to a special site each time I want to search, and I’m not willing to switch browsers just to use the toolbar (it’s not supported for Google Chrome). It’s a good idea, but has much room for improvement in terms of its ease of use and interface. For now, I’ll pass. Google did a much better job of this with it’s Chrome for a Cause campaign last year.

Like SwipeGood, SocialVest is also tied to transactions. By clicking on links to online retailers on SocialVest’s site, you can earn donations to charity by making online purchases. SwipeGood gets referral revenue by providing links to these retailers, and you can usually earn¬†between 1%-5% of your purchase amount towards charity. Although SocialVest attempts to make giving easier, I’d argue that it actually makes it harder, at least when measuring effort. You have to head to their site, then find the retailer you want to purchase through, and then make your purchase. Certainly more effort than going directly to say, and being done with it. SocialVest does allow you to make donations without paying anything out-of-pocket, but I question how many people will go out of their way to use the site, since this is all it offers.

Do you think these sites truly offer a better giving experience? Will they truly Or are they missing the mark?

How much should we give to charity?

How much should we be giving to charity? I’ve been thinking a lot about this question – while I don’t have a specific answer to offer, I thought I’d share some various perspectives. The most common answer I’ve heard (especially since I grew up Catholic) is that people should donate 10% of their income. You might have heard this referring to as tithing. But the meaning of the term various through history and across cultures (just take a look on the Wikipedia entry). So how should this be interpreted at present?

I found one group that’s formed a pretty specific answer, called Giving What We Can. Its members pledge to give at least ten percent of their income to organizations that fight poverty in developing countries. This is a slightly different take on what is taught in religious contexts, that individuals should give money to their church, synagogue, mosque, etc. Giving What We Can has devoted much of its site to arguing why using donations to fight poverty in developing countries is the “best buy” for charitable giving, and their perspective is worth reading.

Some of the answers I found on Quora frame the question slightly differently. One author believes that since so few people give anything to charity, it’s more important to focus on whether we give at all, instead of how much we give. I’m not sure what percentage of people give nothing (or very little) to charity, but assuming its a significant number, perhaps that’s the right place to start for some. No one is going to go form zero to giving away much of their income without taking some incremental steps along with way.

The more I think about this, I don’t think there’s a fixed, one-size-fits-all answer for everyone. Should a wage-earning single mother of four really donate the same percentage of her meager income as a married couple of professionals with no kids? How about a recent college grad whose paying of loads of student debt? Or a multi-millionaire?

Instead of answering those questions, I’ll note a couple of examples of people who’ve set the bar very high: Warren Buffet who pledged to give away 99% of his wealth and is encouraging other wealthy Americans to donate at least 50% of theirs; and the widow in Mark 12:41-44, who gives away “all she has” by offering up a couple of small, nearly worthless coins. Read the stories of each, if you haven’t already. Perhaps following the examples of people like this, and challenging ourselves to constantly get closer to those standards is the way to go.

How much do you think we should give to charity? Is there an answer that works for everyone?