The Charitable Gift That Keeps On Giving

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Trends Philanthropy

SubscriptionTrends_2x_Purple.png“If you can’t feed a hundred people, feed just one.”  ~ Mother Teresa

Last year, on December 1st, PayPal broke a Guinness World Record for the most money raised online for charity in 24 hours. On that day—known as ‘Giving Tuesday’—PayPal users around the world gave more than $45.8 million to charity, more than doubling the previous record of $19 million. PayPal achieved this milestone by providing a simple and secure way for its users to donate money to the charities of their choice. Giving via a mobile device accounted for 9.1 million of the gifts made, or 21%.

No one would deny that forty-five-million dollars is a huge sum. And many charities do take in the vast majority of their donations at the end of the year when people habitually make large, lump-sum gifts towards the causes they want to support. But what if charitable organizations could receive donations in a more consistent, recurring way throughout the year? After all, the subscription model and its benefits are just as applicable to nonprofits as they are to for-profit ventures.

Many nonprofits recognize this and encourage their supporters to make their gift monthly by providing a credit card number. These organizations are hoping that—like their Apple Cloud storage, Spotify, or Hulu subscription—a recurring amount of a few dollars is easier for people to commit to than an annual amount of a few hundred. Giving regularly also eliminates the dilemma of “Do I give this month or do I pass?” Donors sign up once and don’t have to think about it again knowing they’re providing consistent donations to causes they support. And the charity has a more predictable revenue stream which helps them to better plan their spending.

In addition to established nonprofits providing for a monthly giving option, new nonprofits have emerged that are based entirely on the subscription model. For example, Friday5, whose donations come from their subscribers who give (are automatically charged) $5 every Friday.  Each week’s proceeds are given to a different charity, chosen and vetted by Friday5.

According to an article in Forbes, “one of the main pain points of the philanthropic sector is that organizations have to keep bothering or reminding people to give. Friday5 eliminates that bother by having you sign up once.” The founder, Michael Berman, calls it “charity on autopilot,” eliminating the hassle and bother of having to remember to give to the causes you support. Friday5 also introduces its donors to new charities with which they may not be familiar.

Supporting worthy charitable causes isn’t just the realm of the nonprofit sector. Many for-profit businesses give to charity. It makes them good corporate citizens and it’s also good business. A 2013 social impact study by Cone Communications included these key findings which demonstrate how genuinely committed Americans are to supporting businesses that help others:

  • 54% of Americans bought a product associated with a cause over the last 12 months, increasing 170% since 1993
  • 89% of Americans are likely to switch brands to one associated with a cause, given comparable price and quality, jumping nearly 35% since 1993
  • 91% want even more of the products and services they use to support a cause

Subscription businesses wanting to incorporate charitable giving into their business model could designate some percentage of their profits to a chosen charity, or they could sell one-time items that support a cause. There are indeed a plethora of subscription boxes that help support various charities. Regardless, whether your subscription business is for-profit or not, you’ll need a flexible and scalable subscription management platform to power your success.

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