Steal My Idea: “Paypal it Forward”

A way to add passive charity donation to shopping cart transactions

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Note: If any of these services already exist or a similar service exists, please alert me in the comments so that I can promote it and amend this post.

Option 1
A shopping cart service (like Big Cartel or Shopify) that automatically adds an additional 1%-2% fee to each paypal transaction, which, at the end of each month, is donated to the sellers preferred charity. Buyers would receive a notice upon the completion of the transaction, that a small percentage of their total was donated to charity by the seller.

Pros: If very user friendly and easily editable to match existing websites, it could easily take over the market as preferred shopping cart; by alerting consumers that even a small portion of their sale is going to charity, it will bring attention to the charity and positive press to the seller

Option 2
Ideally—An option within paypal itself to use a portion of the percentage they already take and donate it to a charity (making it a write-off for paypal, not paypal users). For example, if your paypal fee is 2% + $0.30 USD, 1% would go to paypal and 1% would go to a preselected charity

Realistically—An option within paypal itself to add an additional 1% donation fee to each transaction. (making it a write-off for the user not for paypal)

Pros: Easiest to integrate; would be the most widespread in all communities; would make Paypal seem like less of a necessary evil

Cons: Transparency with Paypal, organization of information hierarchy to make this user-friendly to the masses (Paypal isn’t the most perfectly designed system by far); Paypal execs would have to have seriously big hearts to adopt the ideal method

Option 3
A new paypal-like service in which all profit from fees would be donated to a charity of your choosing. This would be a much larger undertaking and because of the ubiquity of Paypal would be the toughest to sustain but in the end would be the most rewarding for charities.

Pros: Most money donated (highest percentage going directly to charity), self-contained so startup would have most control over design and implementation.

Cons: Paypal is so widely used that a completely new system may take years to be properly adopted

Why it should exist:

There are currently not a whole lot of solutions for passive donation through online transaction. I believe that these afterthought tiny donations with each transaction could make a giant impact to many charities. While many charities offer a somewhat passive way to donate (signing up for monthly automatic donations) this still requires an upfront commitment and also limits the donation to a specified amount. People are also most likely to cancel this sort of transaction if they come upon tough times. If the donations were flexible based on how much money you are taking in, people are more likely to continue using the service. Also, individual one time contributions (or even monthly continual contributions), unless publicized by the donator, do not virally encourage other individuals to donate. Having a service that makes the buyer aware with each transaction advocates for the charity over and over again encouraging more donation and bringing visibility to the charity.

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Steal My Idea is a new addition to my blog in which I share ideas I have that I am unable to bring to life on my own. Some will be silly, some will be for the greater good, all are free for the taking if you have the desire and means to execute them.
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manu says:

you´re my inspiration jessica

Posted July 8, 2010

Kevin Tucker says:

or, what if Paypal itself launched something like option #3, as a non-profit sister company of sorts, that had a variation on the Paypal name, or maybe they just operate that under “paypal.org” ? (they already own the domain name). Or maybe they could call it LapYap

Tanya says:

When I see this post….all I can think about is how great the CSS is!

Julia Spangler says:

Ditto on the CSS, but I’d say the idea is even better. I agree that passive donations would make a huge impact. Do you use Kiva? That’s the only place I’ve ever seen a model like this in place, but I don’t do much online shopping. During your Kiva loan transaction, there’s an option to automatically donate $5 or something like that to support the Kiva organization itself. I think Realistic Option #2 would end up having the most impact, but I can definitely see a new start-up adopting this model.

minkee says:

wonderful idea I know I donated some money to Oxfam for Haiti recently via paypal when it was offered as an addition at the end of the transaction. I can’t for the life of me remember what I was buying though – possibly it was through ebay? I shall dig around and see if I can remember.

jenni has her head in the clouds says:

Ebay does something kinda like this. When you’re paying for something via paypal, it asks if you would like to donate $1 to so-in-so charity. But that’s the only place I’ve seen something like that.

Great idea!

Kyle T. Webster says:

Very smart. I like options 1 and 2. I hope somebody with the means makes this happen.

Laila Rezai says:

Jessica, there is someone that I go to school with that I’ve nicknamed “Bright Young Thing,” but I think that it equally applies to you. The graduate program that I’m in focuses on business and sustainability, so your idea is completely in sync with a lot of what goes on in our program. I forwarded your link to some of my classmates. I’ll keep you posted if anyone decides to take your idea and run with it. Keep on shining, Bright Young Thing!

awesomerobot says:

eBay actually integrates charity donation somewhat well. When selling an item you’re prompted with an option to give a certain percentage of the sale to a charity of your choosing and also, when buying an item you’re given a similar prompt to donate (though it’s only $1).

I think it would be interesting to have passive donation attached to an existing balance within a paypal (or equivalent) account. I can only speak for myself, but when I sell items or receive money in general via paypal – that money usually sits there in my paypal account until I buy something with paypal again. Sometimes this can be weeks or months. If I could set up some sort of automated donation based on my standing balance I probably would.

For example, I could say if I have more than $25 in my paypal account donate 5% of my balance every month with a maximum donation of $50. So anytime I had more than $25 in my account I’d be donating money every month, once my balance dips below my minimum donation stops until my balance raises above a certain point again. This would have to be combined with a reminder email every month (you’ve donated XX this month, you’re donating X% of your standing balance every month, click here to stop). If paypal added a service like this I’d probably donate to charity more frequently because it’s automated – as you said, starting and stopping a monthly charitable donation manually is a bit of a pain (first world problem right there), and often results in people not re-enrolling.

That being said, I like the idea of donating fees – It’s less subjective and would generate much more cash flow. There’s some talk of paypal, but I honestly wish that there was a viable paypal alternative out there – though paypal is so ingrained into the internet that it’s really hard to compete with just due to sheer convenience - even Google (with Google checkout) struggles to compete on the same level. Maybe an open sourced option similar to OpenID is warranted - an API that multiple paypal competitors could tie into…

Posted July 9, 2010

Jessica Hische says:

awesesomerobot: excellent response! I haven’t purchased anything on ebay in some time, but that is great they are integrating a donation. This still requires a yes or no each time, but with small amounts it’s tough not to say yes (I noticed they do this at certain drug stores as well like rite-aid and cvs from time to time. I think there would be a huge positive response to an open source paypal alternative (it immediately made me think of the kickstarter craziness for the facebook alternative), but again for it to work its way into our every day lives it might take too long to sustain VC funding. (paypal would probably end up buying the thing before it was viable, ha) One thing that this project would have a major leg up on is that any VC funding it did receive would be a write-off for the donor (as long as it was all kept as strictly non-profit of course, which I would hope for.) The paypal balance proposal is a good one, I feel like that and the donation fee could work together and you could easily opt in or out of the balance option. I’m the same way with my paypal account, makes me feel like I’m not actually “paying” for things when I buy them on the internet, ha.

Brooke says:

As a nonprofit fundraiser, I am TOTALLY stealing this idea!

Ricky says:

Just saw this via GOOD: http://socialvest.us/

Posted July 23, 2010