December 13, 2007 | Read Time: 2 minutes
A new fund-raising effort that links credit-card purchases to donations to the United Way of America is being hailed by some as “one of the simplest giving programs ever created.”
But Jack Siegel, a Chicago lawyer and watchdog, says the effort is a poor idea that sends the wrong message to donors and could actually hurt the United Way’s future fund-raising efforts.
Through the new effort, called Pennies for Change, people who use cards from the 13 banks in the program can opt to be charged an additional penny for every transaction they make. The banks and credit unions will pass the donations to United Way of America every month.
Mr. Siegel, writing on the blog Charity Governance, predicts that the program will become a popular one for charities and he expects other organizations to attempt to create similar partnerships with banks and credit-card companies.
But Mr. Siegel does not think that other charities should adopt the approach, saying the effort will marginalize more traditional fund-raising efforts.
“It degrades charity by trivializing it. Joe Football gives a penny to charity when he buys a $5,000 60” plasma TV so he can watch the big game on Sunday,” Mr. Siegel writes. “The donation feels a bit disproportionate to us.”
What’s more, Mr. Siegel writes that many donors will not know where their money is going. He is particularly skeptical about the fact that nearly half of the money raised through the program will support the United Way’s national office.
“In our view that is a transfer to cover administrative expenses and overhead,” he writes. “We find it hard to believe that local United Ways routinely transfer 45 percent of their donations to the mother ship. We suspect most donors would stop giving if they knew such a large portion of their donations were leaving the local community. We wonder how many donors will recognize what is happening to their one-cent donation.”
What do you think? Is Pennies for Change an innovative way to inject money into the charity world? Or will it do more harm than good? Click on the comments link below this post to share your thoughts.
