A cold call led Softgiving CEO Matt Pfaltzgraf to a conversation with the head of national partnerships at World Vision, one of the largest relief and advocacy organizations in the world.
World Vision was looking for a non-traditional solution to connect with a younger demographic. Pfaltzgraf sold them on the vision of Softgiving, an Atlanta-based fintech startup that engages current and prospective donors with a micro-donation app that links to a debit or credit card to donate spare change.
With the startup’s help, World Vision put together a targeted campaign, launching this month, geared toward the half a million donors in the World Vision ecosystem.
To prepare to capture the donations from this major campaign and upcoming launches, Pfaltzgraf and his team started working with payments giant First Data to find a better way to capture micro-donations.
“Helping non-profits is the first part of the equation. What’s really important about what we’re doing now, including this new First Data partnership, is that it allows us to branch out into a whole new giving ecosystem that we’re calling ‘consumer philanthropy,'” Pfaltzgraf tells Hypepotamus.
With First Data’s partnership, Softgiving plans to reduce the friction of donations even more by circumventing the need to enter online banking credentials every time the user donates. They’re utilizing First Data’s STAR network, the nation’s largest independent debit network, serving over 150 million customers.
The user will be able to simply enter their card number and link their accounts to their Softgiving profile.
The feature also gives Softgiving the opportunity to partner with over 4,000 financial institutions. On the First Data side, it will drive engagement and card loyalty from a user standpoint, by making charitable contributions that much easier.
“This will be a significant technological advance that we will be performing because most of the other fintech entities like the Mints and the Acorns require OAuth aggregators to do round-ups. We will be the first ones to have direct network relationships, where somebody can sign up just by entering their debit card number,” says Pfaltzgraf.
“They could market directly to their customers as a way to use their debit card to benefit a non-profit they care about through change donations,” he says.
Softgiving will be rolling out these capabilities to all non-profit customers, not just World Vision. That currently includes CARE and Mississippi Public Broadcasting, comprising a total donor base of more than 10 million.
Pfaltzgraf cites their conversion rates as evidence that the spare change donation concept really works. In a recent series of campaigns last month, Softgiving saw their conversion rate climb up to the upper sixties, with a year-over-year retention rate of 90 percent.
The new Donor Rewards app is another piece of the puzzle in “bringing merchants and financial institutions into the giving experience for an individual.” They partnered with Atlanta-based software company Sionic Mobile to launch this app.
Similar to e-commerce reward service Ebates, the user receives 1-10 percent back on purchases from participating merchants like Home Depot, Uber, etc. The app then gives the user the choice to donate all of the reward money, keep it, or split it 50/50.
“This enables our donation solution to be truly for those that don’t think they can afford to give. They could actually make more money back in rewards than their change donation cost them,” says Pfaltzgraf.
That app will be available on Apple and Android devices in the coming weeks.
“We’re casting a wide net where a partnership like First Data enables us to hone in on an individual’s own giving preferences, allow that bank or that merchant to partner directly with them and impact the community in a positive way,” says Pfaltzgraf.
