Is this philanthropy? Or charity? Or ...?
Dollar-A Day (https://dollaraday.co ) made its debut earlier this fall in the United States and today (October 16) has 807 subscribers. That number grew by three people overnight last night. When I first looked at the site on October 5, it had about 450 members.
Each day each member gives $1 to the charity-of-the-day designated by the organization.
The offer is straightforward: “Dollar-A-Day is a simple new way to discover and support amazing nonprofits. We feature one great organization every day, everyone automatically donates $1.”
You enroll by setting up a $30 monthly charge on your credit card. As they explain “Every day, we all give a dollar to the day's featured nonprofit. No daily actions — it's automatic. Our (tiny) daily email will tell you about the nonprofit we’re all supporting together that day.” Plus we're told that our gifts will be anonymous to the recipient charity - the implication being we won't be hearing back from recipient charities with those annoying emails and mailings.
Dollar-a Day is itself a charity, or in US parlance, a registered 501(c)3 nonprofit. Its web site posts a calendar 60 days in advance to tell you where your daily dollar will go. Each profile includes a photo, a paragraph description and a link to the favoured charities’ various websites. From your $1 daily donation, four per cent is charged as a processing fee paid to Network for Good, itself a nonprofit and a well-established payments processor in the U.S.,
It’s clever and truly innovative. Run mostly by volunteers (we are told), this is the very definition of “well meaning.” They could generate some serious money. But I can’t see them producing many serious donors. It seems more likely to foster superficial engagements and commitments.
If people outsource the task of selecting the charities they support, that will often be the end of any thought given to those charities. The premise described on the web site is that dollar-a-day donations could lead to further engagement, and of course it could, in theory. But an endless stream of causes and charities would eventually just wash over me. Apart from possibly looking at the daily email and going “huh – cool,” many people (I predict most) won’t go any further with any charity.
I also have to trust the judgement of the people running the web site (and assume they are competent) to identify good organizations. The stated criteria borders on a list of buzzwords that sound good but I’m not sure where that leaves me.
Now $360 per year is higher than the Canadian average annual donation credit claimed from CRA so if this was available in Canada, enrollment would raise the total donation to charity for some people. But what ownership would they feel for any charitable activity? Or satisfaction as a donor, apart from a generalized sense of “being a good person” or “doing something for charity.”
I also expect enrolment would, for some, act as a cap on their giving – a kind of immunization against other appeals. It would be easy for me as a member to conclude that I’ve done my part in the world by “supporting amazing nonprofits” – 365 charities in a year.
The supported list naturally skews to “national” organizations, so by and large people aren’t going to discover local charities with whom they might be involved. Yet clearly there are many fine organizations on this list, and members can nominate others.
This is no ticket to riches for each charity. Each one profiled currently gets $804 once a year. Maybe twice that if the list repeats, which it can. For the site to have a dramatic effect for anyone, it needs to recruit tens of thousands of members. But the 804 current members already have a sense of doing something powerful together.
I wish them well. I hope they recruit thousands of people and I hope participation entices people into deeper engagement with good organizations. But encountering Dollar-A-Day helped me clarify the difference between charity and philanthropy.
I’m not one who thinks that “philanthropy” refers to big gifts and “charity” to small ones. That thinking is stupid and insulting to donors. But for me, there is a difference and it has to do with the orientation of the donor.
To me, charity captures the act of a moment that makes me feel good as a donor.
Philanthropy has a larger element of commitment, even sacrifice and involvement aimed at changing someone else’s life.
I hope the dollar-a-day method proves me wrong and is an onramp to philanthropy for many of its members.
Update: For a critique of this post see http://www.kmaconsultants.ca/blog/dollar-day-rethinking-critique
A for-profit version of dollar-a day
Don’t be confused if you do a web search. There are two organizations with nearly identical names but some important differences – including that dollaradaygiving.org is a for-profit company in Texas while dollaraday.co is a not-for-profit. I don’t know which came first.
The for-profit site doesn't make it really clear that it is not a charity, unless you look for and read the FAQs. It certainly looks and reads like a charitable fundraiisng site. Their intent appears genuine - to support chairties, and paying their costs (and making any profit) out of the 20 per cent portion they keep for expenses. That's very explcit.
Dollaradaygiving.org describes itself as “promoting conscious capitalism,” with cause-related marketing and a “giving team model” that rewards donors with cash (on a one-time basis) if they recruit other donors.
“Dollar A Day also provides an opportunity for you to be rewarded for adding friends and family to your ‘Giving Team.’ Once you have 10 donors on your team, we will offer you a one-time marketing bonus of $500 that you can keep for yourself, give back to Dollar A Day, or donate to any charity of your choice!
“Dollar A Day gives 80% of all donations to our beneficiary organizations listed below, and we use the remaining 20% to keep ourselves in business so we are able to continue to help kids. If you have more questions feel free to browse our FAQ page.
Within the FAQ’s we get more clarity. “Dollar A Day does not offer a tax-deduction for donations because we are not a 501(c)3 nonprofit or charity organization. However, because we are a for-profit corporation, we allow our donors to earn a $500 marketing bonus for sharing Dollar A Day with their friends and family!”
I wondered if it was an introduction to some sort of pyramid scheme but it's not - you can only get the $500 once, and you don't benefit if your friends also recruit donors. But these donors are not getting tax receipts so after the first $500 rebate ($140 personal profit on your first year of giving at $30 a month) you have to wonder why people would choose this channel. Especially since the 20% portion of your "gift" taken for costs is in addition to whatever operating costs the recipient charities incur on a day-to-day basis.
I'm not sure what this really is - it's sure not philanthropy and likely not even charity. I do expect not all people who stumble on this site will sort out the exact nature of transaction they are inviuted to undertake.
- Larry Matthews