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Microdonations – more than just pocket money?

Microdonations – more than just pocket money?

“Microdonations? Is that what this is?” says Anthony Law, founder of Pennies From Heaven. “It’s definitely giving pennies not pounds, but pennies become pounds.”

Pennies From Heaven is probably one of the longest standing methods of ‘microdonating’. It is a system whereby people choose to give pennies from their pay at the end of each month, so if, say, your salary comes to £999.50, you round it up to £1,000 and the extra 50p goes to charity.

Since its inception in 1998, PFH has raised over £1.5m for over 140 charities and currently distributes around £30k a month before Gift Aid.

The term ‘microdonation’ is a more recent addition to the fundraising lexicon. With the rapid development of new technology and social media, plus donors’ increasing familiarity with it, has come a number of ways of giving small amounts of money, although all seem to have come about through individual innovations rather than microdonating being seen as a method in itself.

Probably the best – or the biggest – examples of microdonations in action are at eBay. Its ‘Give at Checkout’ scheme gives buyers the option to add a small charitable donation when making purchases. Since it was launched in November 2008, it has raised £2.54m for 533 charities, with 57 receiving over £10,000 each. Currently between £110k and £120 a month goes to charity with £130k to £140k being donated from eBay’s sellers, who can elect to give a percentage of their selling price to charity.

Penny On, a scheme to give a penny on top of your shopping bill, has been successfully piloted in the north west. MD of Penny On Stephen Bailey says that during a three month pilot, between three and eight per cent of till transactions attracted the Penny On. Shoppers can choose to add as much as they want to their bills – a penny, rounding the bill up to the nearest pound, adding a couple of quid. Each penny has a bar code like any other item and is very simple for retailers to use. Penny On chooses the charities to benefit, but picks local and international organisations that support the .

Marc Simpson, founder of ploink!, wanted to create a way of giving online that emulated putting coins in a collecting tin or in a piggy bank. “They are like micro-pledges,” he explains. “You put a penny into the virtual pig online. When it gets up to 99p you can either donate that 99p via your credit card, or you can wait until it gets up to the maximum of £10.” It’s early days for ploink! but it has already donated around £1,500 and has just under 600 people signed up with about 200 charities on the site.

It hasn’t undertaken any advertising or marketing so far other than using Twitter and Facebook because Simpson wants to get the model absolutely right before he is inundated with donations.

ploink! has its Gift Aid audit trail approved and Penny On is ‘having an ongoing dialogue’ with HMRC so that it will also be able to apply Gift Aid to donations. Pennies For Heaven collects Gift Aid on all its donations.

Other initiatives such as Cofacio also donate money to charities. Cofacio works as a ‘help engine’ and works by members getting awarded ‘points’ every time they answer or ask a question of the community. Members themselves decide where to cash in their points, supporting one of the charities (there are currently four). Corporate partners provide the financial backing to convert points into money.

This follows on from search engines such as Everyclick (which has so far donated almost £1.4m to charities), Clicknow and search2give that donate a set amount to charities every time someone uses them to search for something on the internet.

There will be more in the pipeline. Giving has remained static for most of the last 10 years, and with the economic outlook still a bit rocky, perhaps ways of collecting small amounts of money that aren’t so noticeable on individual balance sheets, but add up to significant sums on organisation’s accounts, are worth looking at.

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