Every little helps — Micro Donating and the Charity Sector

Spare change is something we rarely think about, if we see or drop a penny on the street we are likely to ignore it. This way of thinking should change. This spare change adds up quickly, for example, it’s estimated that £343 million is laying in British homes in form of spare change.

The real question is how can we convert this wasted spare change into something that could be useful? The good and bad news is that we have been moving towards a cashless society; with only 9% of payments expected to be made with cash by 2028. This has been great at reducing both, economical and physical waste. Yet it has also had a devastating effect on those that rely on cash incomes such as the homeless or charities.

Just like any other business charities also rely on money to continue the important work they do. Yet despite this charities have failed to adapt to the new technology landscape. We have seen the number of people regularly donating drop in recent years. The rise of cashless payments is certainly a contributor. Charities still receive 53% of their income in cash, despite cashless payments rising elsewhere. On top of this, the digital charity skills report revealed that 52% of charities lack a digital plan. Meaning that many are likely to be left behind as they fail to adapt.

So, what has been done? While the charity sector might be failing to keep up, that isn’t to say there has been no innovation. Over the past years, more charities have adopted digital checkout strategies. A perfect example is partnering with the FinTech organisation Pennies. Pennies is the self-described “digital charity box” charity organisation. Their aim is to use the power of micro-donations to support other charities. It works by having customers round up payments when using chip and pin devices to donate to a worthy cause. Overall it’s been a resounding success, since launch they have raised over £25,000,000 for charity from over 100,000,000 donations.

What potential do micro-donations have? The potential for micro-donations is enormous. If for example, every UK current account holder were to donate 35p a week, we could raise £1 Billion each year. Imagine the potential of this same scenario on a global scale. Another great example would be the viral “1p Challenge.” The concept is simple. You save one penny on the first day, two pennies the second day, three on the third and repeat for a full year. At the end of the 365 days, you will have saved £667.95 all from spare change! Micro-donations will play a key role in the charity sector in the coming years as we move away from cash and continue to shop more digitally.

So where do you go from here? Micro-donations present the opportunity to help millions but are being held back by low adoption from businesses. What would be ideal to see would be large chain adoption from businesses such as Tesco, Asda or Sainsburys. These businesses would be ideal thanks to their large number of stores and high footfall. A secondary opportunity, that Pitch In is tackling is to remove the location restrictions on micro-donating. If micro-donating were to be linked to bank cards rather than stores then every store would become a payment rounding opportunity.