Rerouting Rewards

This concept is the result of a 3-week validation sprint by an IDEO team with collaboration from ideas42, a non-profit firm that uses behavioral science insights to address complex social problems. For more information about the context and background of this work, read this blog post.  

Why BGS is Excited About This Concept

• Creates a charitable giving opportunity in a moment when a donor is receiving value (ex: stock dividends), targeting donations that are just as valuable as money to nonprofits, but may feel easier to donate for consumers.
• These sorts of donations might also prove more technically feasible for credit cards or other financial services to execute; for example, Chase and American Express recently began offering an opportunity to donate to select charities.
• This concept explores how rewards beyond credit card points can be donated. It also explores additional features and functionality that can enhance the donation experience currently offered to users.

The Opportunity

The following is a representative user scenario based upon our IDEO team’s interviews with real people: 

Gayle tries to regularly support medical research into a rare genetic disorder that runs in her family, but feels inconsistent in her giving. Her income and spending habits vary month to month, making it hard to find the right moment to give. However, she would gladly donate a percentage of all her earned credit card points, since it won’t affect her monthly finances. She’d also donate a small percentage of investment returns from her stock portfolio when they rise above a specific threshold — sharing some of the benefits of more lucrative stretches of time in her personal finances.

The customer has causes they want to support in the background of life. We can help them streamline it, discover more causes to support, and handle the tax work at the end of the year.

Fintech Co-Founder

By targeting these unique financial moments, there’s an opportunity to increase charitable giving when people are feeling resource abundant. Furthermore, donors are less likely to feel like they’re giving something up, i.e. reduced “loss aversion”, when donating smaller, non-monetary gifts.

The Concept

Partner with a credit card issuer, investment firm, or app-based brokerage firm (ex: Robinhood) to promote charitable giving within these “reward” or “windfall” moments. 

People can already donate credit card points, but awareness is low and no programs exist (so far as our research revealed) that allow card holders to filter points directly to nonprofits in an automated, recurring manner. Additionally, few easy opportunities exist to donate stocks, or small slices of positive returns, consistently over the course of one’s life. More commonly, stocks are donated in wills or endowments after the stockholder passes away.

Potential Challenges

• More research is required into people’s relationship with credit card points and stocks, as well as the behavioral economics surrounding donating these non-dollar assets
• Further research and testing are required around the particulars of donating fractional shares or tax/legal liabilities of passing along returns

We’re looking to be the enabler more than the donor.

Credit Card Employee, focused on cause enablement

Rewards points are flexible, but they are also a debt to the credit card company. As a result, these companies are often looking for ways to help people spend them.

Credit Card Expert

Success for this concept depends on finding the right partner to engage with the Better Giving Studio and collaboratively finding  the best ways of encouraging cardholder giving and delivering against the partner’s Key Performance Indicators (KPIs). The business realities of when/why/how integrations like this are worked into key interactions are paramount to achieving  success.

What Do You Think?

Are you working on something similar? Have feedback to give us or insights that we should know about related to this exploratory concept? We’d love to hear from you! Please write us a note at [email protected]