15 Jul Retailers to make donations through online purchases !
Living with her parents in Maroubra, Ms Thomas studies graphic design five days a week, leaving her no time for a job and forcing her to cut into her savings until she completes her study later this year.
As for many Australian millennials, Ms Thomas’s circumstances leave her with little spare change to donate to charities each year.
“It is not realistic. Because I am not working it is quite hard to give out money, even though I feel guilty,” she said. “I would definitely like to be giving more.”
Ms Thomas’s predicament is not unique, prompting one Australian social enterprise to find a way to help consumers “give free money to charity”.
Folo is a web browser toolbar extension that automatically generates free donations from purchases made online, paid for by the retailer.
A consumer using Folo selects a chosen charity or cause area, after which the toolbar will appear alongside any online retailer that is registered on the platform, stating how much of every purchase will be donated to their chosen charity.
“Just 500 people using Folo will generate $15,000-$30,000 a year in donations. One million users could generate $30 million-$60 million,” Folo spokeswoman Jaimee Abict said.
After discovering the app, Ms Thomas said its simplicity was what made it appealing.
“The money is coming out from what you are already happy to spend, so there are no extra costs. This will definitely appeal to other young people.”
Folo has secured more than 700 retailers on its platform, including The Iconic, Woolworths, Expedia, David Jones, Dan Murphy’s and Sephora. Among the registered retailers, the average donation offered is between 3 and 5 per cent of purchase costs, although some offer contributions of up to 10 per cent.
Interestingly, the platform also allows consumers to keep the percentage returned by the retailer if they so choose, to allocate to their “own personal cause”.
The latest Australian Charities Report by the Australian Charities and Not-for-profit Commission showed that charities received about $6.8 billion from donations and bequests in 2014.
More recently, the National Australia Bank Charitable Giving Index found overall giving to charity in Australia grew 6.5 per cent in the year to February 2016, with the average donation size across all charities growing by $12 to $348 per donor.
The Index found that the average annual donation size increased in all states except Western Australia and all age groups except 15-24-year-olds.
Ms Abict said slow donations growth among young people, or “generation slacktivist”, proves the potential for platforms such as Folo.
“Even if you’re a uni student who doesn’t have a lot of disposable income, you can be regularly donating to a charity just by buying your textbooks online.”
Professor of accounting at the University of Sydney Business School Sandra van der Laan, said the model presented positive opportunities for the charity sector.
“The [sector] is finding it difficult to raise funds in the current economic climate, and this might reduce their fundraising costs.
“It is way of making it easy for someone to be able to donate and still buy whatever they want,” she said, adding that the model could also present potential risks.”When you donate to a charity as an individual you get a tax deduction, the question is, where are those tax deductions going?” she said.
“Normally if you donated $5 to the Red Cross, you as an individual would get a tax deduction. So would you not be better off as a consumer donating separately and claiming back the tax deduction on your donation?”
Ms Abict said any donation payment made to Folo was considered a marketing expense for the retailer, “meaning it is entirely tax deductible for them as an expense”. Folo then makes a pooled tax deductible donation to each registered charity once a year.
Professor van der Laan said the charities that stand to benefit most from the platform were likely to be bigger, well-known charities.World Vision Australia is already on board with the concept.
“It’s great to see social enterprises like Folo leading the way in cause-related marketing, giving people the ability to raise funds for their chosen cause through everyday purchases,” World Vision Australia’s chief executive Tim Costello said.