Donating money to charity is good and worthy. But should nonprofits encourage you to go into debt in order to do so? A new VC-funded company, BGenerous, says the answer is yes.
Donating money to charity is good and worthy. But should nonprofits encourage you to go into debt in order to do so? A new VC-funded company,Hundreds of thousands of charities around the country rely on small-dollar donations from a broad range of individuals. As those donations move from physical checks to online pledges, BGenerous has decided to apply the buy-now-pay-later playbook to them. They call it "donate now, pay later.
Drake Bank and BGenerous split a commission of between 10% and 15% of the total donated, paid by the charity .BGenerous CEO Dominic Kalms tells Axios that when given the opportunity to pay over time, 82% of donors double their donation — with that number rising to 89% among donors giving $1,000 or more.The model is “uncomfortably nearing the space of payday lending,” says Stanford philanthropologist Rob Reich.The BGenerous product is an iron-clad commitment device.
Charities need all the tools at their disposal if they're to maintain their small-dollar income stream.Charitable fundraising isn't cheap — it generally costs the nonprofit around 25% of the amount donated.is "not terrible," says Caroline Fiennes, the director of charity evaluator Giving Evidence, when compared to the cost of raising money from foundations. That works out to at least 17% for smaller charities.