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, bananarepublic.com 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?

6 thoughts on “How does transaction effort impact giving?

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  2. This is a great post and a fascinating topic! I think transaction effort does impact giving, but on the other hand I’m one who tends to advocate INCREASED transaction efforts because I want donors to think deeply about the impact of their donation. I don’t think people should donate to any old organization with only a minimal forethought. I want donors to research deeply into potential organizations they are donating to using websites like Give Well and Charity Navigator, to ensure they’re donating to a good cause and their dollars are going to make an impact. After all, poor research on the part of donors is what ends up supporting charities that are ineffective or just not doing a good job.

    1. Good point, Akhila. I would identify the efforts you’re referencing as “transaction awareness” – meaning that we’d want donors to be aware of whom their donating to and confident that they’re making good choices. I’d advocate for increasingly useful tools to help donors easily gain this awareness. Think about how much information is available to you if you want to purchase, say, a new TV – there are countless sites that will provide you with reviews, specs, and pricing information. Now compare that to the amount of information you can access should you want to identify to a clean water project to support – pretty paltry, isn’t it? I’m working on some ways to help bridge the gap in my own work, so I’d love to hear any thoughts you have on the subject.

  3. This is a fascinating article. Its actually what drove us to build our start up venture. We wanted to make it easy for people to donate actual goods. I strongly echo that if we can simplify the transaction process of giving non profits would see better results and the community they serve could benefit from more of their services.

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