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Lead Story

Payment IPOs in the public eye

Ann Train

News

Industry Update

China UnionPay expands mPOS options

Bright future predicted for Global, Heartland

FIs gain time in Home Depot settlement dispute

Countdown for charitable giving

Features

Balancing big data and consumer privacy

The Clearing House stakes its claim in real-time payments

Bob Rohr
First Annapolis Consulting

Mobile forward 2016

ISOMetrics:
What will global payments look like in 2019?

Dispense with bad tech habits in 2016

Selling Prepaid

Gift card spend to reach $26 billion

Views

Online, mobile gaining on brick and mortar

Patti Murphy
ProScribes Inc.

A giving commitment

Thom Aldredge
The Give Back Campaign

Education

Street SmartsSM:
What does the crystal ball say for 2016? - Part 2

Jeffrey I. Shavitz
TrafficJamming LLC

The one man show: Be a piker, dream middle class

John Tucker
1st Capital Loans LLC

Build your business with trust in 2016

Jeff Fortney
Clearent LLC

2016 payment trends - What's to come?

Michael Gavin
Cayan

Company Profile

Capital for Merchants LLC

New Products

Turnkey e-wallet, e-commerce solution

ShopperPress module
Allied Wallet

iPad POS tableside ordering

TouchBistro 7.0
TouchBistro

Inspiration

Switch it up in 2016

Departments

ADVISORY BOARD: Welcome to a new year in payments

Letter from the Editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

January 11, 2016  •  Issue 16:01:01

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A giving commitment

By Thom Aldredge

The cry for help began in late summer, a call to arms for volunteers from the church I attend to build the 100th and 101st Habitat for Humanity houses since the Carpenters for Christ program was founded in 1996. It seemed like the thing to do at the time, so I conscripted in.

At the outset, I was keen to observe the volunteer commitment to a challenging project. On day one, the assembled volunteers allowed for a generous allocation of about 40 people per house, enough muscle to essentially frame the exterior that day and prompt an expectation that the house I worked on, the 101st, could be completely weathered in by the holidays.

However, in the ensuing weeks, volunteer participation declined steadily. Fewer workers showed up, many cut back to a half day of participation and the chance of inclement weather kept people away in droves. At the end of the day, there may have only been four or five team members to complete the requisite tasks for our house. On the last day before the holiday break, the church Habitat "SWAT" team had to be called in to help get the house weathered in, a goal we fell just short of completing.

In retrospect, had our team of 40 first-day volunteers stuck with the project, we'd have been much further along. But the total commitment wasn't sustained. The recipient family remains engaged, as this will become their home. (Coincidentally, the recipient family hails from Myanmar, the world's most charitable nation; see "Embedding giving in the fabric of payments," The Green Sheet, March 23, 2015, issue 15:03:02.)

Giving remains static

In the United States, individuals accounted for 72 percent of charitable giving in 2014, per the National Philanthropic Trust. Despite the uptick in the nation's economy, though, charitable giving remained at a constant of about 2 percent of gross domestic product (GDP). The greatest portion of individual charitable giving came from high net-worth individuals, a stratum of people who have the resources to donate and are philosophically aligned to do so. They have made charitable giving a priority because they have learned it. These individuals equate to the core Habitat house volunteers and recipient families, because they are committed to what is needed, and they perceive the benefit.

The Non-Profit Finance Fund 2014 survey cited a 56 percent shortfall in nonprofit organizations' ability to meet demand for services, and the overall demand for services in the United States is increasing. Over 200,000 nonprofits closed their doors in the last two years mainly because of funding issues. Most nonprofits are vigorously pursuing new funding sources. It is generally expected that government grants and assistance will be curtailed in the coming years, and charitable foundations, although generous, are pragmatic and thus conservative in their distributions.

So the United States needs to grow the 72 percent (people giving) and the 2 percent (amount given). How can that be achieved? By growing the participation in charitable giving and targeting a goal of 3 percent of GDP. Plus, supporters must be enabled to sustain the commitment. Where will that come from?

We can make giving painless

There are 185 million consumers in the United States. Each consumer spends, on average, $55,000 per year. These two factors combined give us an idea of retail/big ticket spend, a figure large enough to require a calculator to comprehend. Let's use $10 trillion in consumer spending as the talking point. The goal, one additional percent of $18 trillion in GDP, would be $180 billion, or about a 2 percent pledge of donations out of the $10 trillion in consumer spending. Those pledges could come from the businesses that receive that spending.

It is a daunting goal to consider. But it doesn't take great imagination to realize that if the additional 1 percent of giving based on GDP could reach the nonprofits, plenty of good would be served. Some might consider it a tax, and if a 100 percent commitment were achieved, in both consumer and business participation, then, yes, if it quacks like a duck, it might be.

However, participation would be voluntary, and there would still be a tax benefit based on donations to IRS-qualified organizations. Even charity to nonqualified community groups, such as school booster clubs, would have a positive effect. And anything that could lead to less dependence on government is goal worthy.

In addition to charitable giving, it would be interesting to determine if the feds would accommodate a voluntary reduction in the gross national debt from the program I just described, with some kind of inducement such as healthcare subsidies or increased social security benefits.

For electronic transactions, this is not a stretch. Dollars in and dollars out can be tracked; pledges can be confirmed against donations. Transfers can happen in real time. A pledging business would have a method for gauging the effectiveness of its participation, that is, how much business was earned relative to the donated amounts. Consumers in such a program, similar to high net-worth individuals, would have the resources and the mindset to commit to helping the worthy causes that matter to them.

There would be flexibility in the system, too. The objective is to make donation transactions seamless, frictionless, unconscious commitments to the goal of increased charitable giving throughout our society. The goal would be much easier to attain if we weren't required to think about it each time we make a donation.

The program I'm describing also has built-in consumer and business incentives. The terminal and mobile device applications are ready. The card companies and processors can pass the required data; hardware companies can complement the electronic transactions should cash, checks or barter be the tender; and ISOs and merchant level salespeople, who are the frontline of sales, are in an ideal position to spearhead programs in their communities to build interest and support.

All of us can become the "40 volunteers" committed to getting the program built.

Thom Aldredge, Managing Director of The Give Back Campaign, has been involved in the electronic payments industry since 1999, with World Gift Card, BAMpay, SignaPay Ltd. and as a member firm in the Electronic Transactions Association. The Give Back Campaign is committed to developing alternative methods of fundraising and marketing for nonprofits, and envisions charitable giving to become a consumer centric activity. The Give Back Campaign encourages processors, ISOs and merchant level salespeople to become involved in community give-back. More information is available at www.thegivebackcampaign.com or from thom.aldredge@thegivebackcampaign.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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