You may think that most of charitable giving in the United States comes from huge charitable enterprises like the Bill and Melinda Gates Foundation, however that’s not true.
In fact, a whopping 71% of charitable giving in the US comes from individuals. But, where does the money go? Well, it usually goes to big non-profit organizations and local causes get left out. In this article, we’ll be discussing how to scale charitable giving at the hyperlocal level and how businesses can make giving back a core part of their purpose.
There is an old way of corporate giving and a new way. The old way is the too-familiar broadcaster model. It’s when a chairman of a company takes photos posing with big cardboard checks. You’ve seen it on TV, on social media, and in the news. At its worst, it is merely performative. A PR stunt to polish the image of a company. We live in a different time now. People easily see through such tokenism. Consumers today demand that companies take action and make a real collective impact on the causes they align themselves with. Throughout the article, we’ll be demonstrating how technology can be used to enable the new way of giving.
This is a summary of our podcast episode with Steve Butterworth the CEO at Neighbourly and John McNeel Co-Founder and Chairman at in/PACT. Both Steve and John run digital platforms that democratize and localize charitable giving.
If you prefer to listen, click play below.
Charitable giving at scale is not an easy problem to solve. There are many tensions to resolve. Where should the money go? How should the money be used? How do we tell stories about the impact the money has made? Though digital platforms may not be able to solve all the tensions of charitable giving scale, they can be used to simplify the process. Both Neighbourly and in/PACT are digital platforms that scale charitable giving at the hyperlocal level. But, how?
Neighbourly connects corporations to local causes so that they can direct their resources and efforts towards programs that their customers care about and are involved in. in/PACT helps companies offer Social Good Loyalty points that their customers can put towards causes they’re invested in. They are both platforms that emphasize that empathy, community, and affinity are integral components of giving.
The old way of giving is transactional. The new way of giving is immersive and hyperlocal. Digital platforms can make giving immersive and hyperlocal by breaking silos and making genuine empathy a pillar of giving not by forcing people to be empathetic, but by making it impossible not to be empathetic. It is impossible not to feel empathy towards people you know, know their names, their faces, or their struggles.
People are more likely to give more when the resources go to causes that affect them, affect their loved ones, or affect the place where they live. Shining the light on local causes catalyses the desire to give. This is how giving goes from a conscious and sometimes forced decision to an unconscious natural decision. It is how giving becomes ingrained in people’s DNA. Technologies enable hyperlocal connections to fuel a naturally occurring empathy.
Though half a trillion dollars go to giving every year in the US, most of the money reached big national and international brand name charities. Local charities are usually left out. This is not because people don’t want to give to local charities, but rather it is because it is harder for them to access support. To increase their level of access to support, radical collaboration is necessary on two main fronts: guiding big corporations on hyperlocal giving and amplifying stories of impact.
Big corporations need guidance on how to create impact at the hyperlocal level. They need guidance to unlearn the transactional, broadcaster, and impersonal way of giving. For centuries the transactional model of giving was what was practiced, undoing these habits takes time, patience, and education. Platforms like Neighbourly and in/PACT see their role as coaches and trusted advisors to big brands. They are a market educator of sorts.
When charitable giving to local causes is set up, the next priority action is to document stories. Stories of impact help the local community feel fulfilled that they are making a difference by contributing, and so encourage further contributions. More importantly, stories create connections, they make things personal and transparent. Stories make giving feel good, purposeful, and necessary.
Call To Action
Did you know that every dollar invested in a local cause goes around the community 3 times? This means every dollar you give to a local charity has 3 times the economic impact. This is called the local multiplier effect. All this to say that there is real power in going local with our charity. Local giving compounds the impact we can make. We can either keep throwing money at the usual suspects or democratize charitable giving and witness impact every day.
Charitable giving shouldn’t be a box-ticking exercise for companies, it should be an immersive experience that is tied to its purpose. This is how consumers trust companies and this is what the world needs.