The future of giving: The rise of micro-donation is revolutionising charity

Philanthropy is thriving, but it is growing at a grass roots level, as well as among the wealthy, as technology drives change.

 

A record number of wealthy philanthropists gave more than 1 per cent of their wealth to charitable causes in the UK last year. According to The Sunday Times Giving List, £2.58bn was donated in 2014, up by nearly 8 per cent on the previous year.

 

But to make true progress towards sustainably funding charities, giving needs to be ingrained at a grassroots level too. This is why micro-donation is increasingly important, as is the technological revolution that has helped embed the concept, making small, affordable payments as accessible and convenient as possible. 

 

As a trustee of Pennies, the digital charity box, I’ve seen first-hand the difference technology has made. The rapid advance of payment technology facilitates small cashless donations, whether online, via mobile payment or in shops, allowing people to give as part of their daily routine and without breaking the bank. 

 

But the rise of this form of micro-donation is not just a technology success story. It owes much to the support of entrepreneurial endeavour by UK business leaders. When the charity launched in 2010, technological change presented an opportunity. To exploit this, the project needed advocates to secure retailers who would partner with Pennies to help the concept reach the mass market. The level of support and buy-in the charity received in its infancy laid the foundation for its ongoing growth. Many of the established City names the Foundation’s chief executive, Alison Hutchinson, first pitched to became fellow trustees or volunteers, offering their business acumen and expertise, and opening doors rather than simply donating. For charities, this involvement is invaluable. 

 

As a result of support from the UK business community, the concept is becoming widespread. Pennies alone has raised over £4m, through 17m separate donations, since it launched. Just 18 per cent of payments are now via cash, and this proportion will continue to diminish. As the UK becomes increasingly cashless, digital giving will be all the more important for charities, and micro-donation through initiatives like Pennies will continue to grow. For instance, if the UK’s 43m card holders donated just 30p a month, more than £150m would be raised for charity every year. 

 

Pennies’ success shows that the right innovation can make a real difference for not-for profit organisations, working hand in hand with the private sector. We need more entrepreneurialism in the charity sector, and it is one of the reasons why Close Brothers Asset Management runs an annual Trustee Leadership Programme. It’s designed to encourage a new generation of trustees, capitalising on evolving skill sets and encouraging innovation and new ideas for charities. 

 

Charitable giving is evolving. Yes, large scale philanthropy will still draw headlines, and will remain a key foundation for providing funding, but technology is enabling regular micro-donation among all strata of society. Embracing further innovation will see even greater success in the charity sector.