The Product that Generosity could be: Charity Bank
A Charitable Challenger Charity Bank [Challenger 2 of 3]
I would hugely enjoy to develop these ideas further. I’d love to be stretched in a Product/UX team, and ultimately I hope to facilitate far-reaching social change through super-charged generosity. Friends in fintech, faith, philanthropy or other, please do be in touch if we could work together.
I am otherwise looking to nurture a group of beta-testers, anyone who’d like to experiment in generosity-games, or for updates generally, leave your details here and I’ll be in touch.
Money is changing. Giving is changing. I’ve explored aspects of these changes in essay 4. I’ve suggest there, that in order to outcompete Stewardship (and to also displace certain other incumbent giving platforms, GiveSendGo, Givey, CAF, JustGiving, Patreon..), one would need to create a tool that is stronger in all of four key aspects: Giving facility; Recipient tools; Trusted brand; Visibility in network. The below product ideas are intended primarily to paint a picture of existing third parties with plausible means and motive to encroach on Stewardship’s core value proposition in the near future.
Challenger 1. GiftAid API — RegTech for Virtual Charity Formation
Challenger 2. Charitable Challenger Charity Bank
Challenger 3. Soft-branded ChurchTech Franchise (in progress)
I think Stewardship and incumbent giving platforms could pursue these three approaches, to augment the way they deliver their current value proposition ~ and perhaps that would be profitable. However, I will hope to expand in essays 5, 6 and 7 ways that the incumbents could deliver a different type of value altogether.
Challenger 2: Charitable Charity Bank
Stewardship should be displaced by a niche neo-banking startup that adapted its product to excellently target Charities ~ in the way that ANNA or Coconut serve tiny businesses and the self-employed, and Pleo or Tide serve slightly larger businesses and established start-ups (and Starling, Monzo, Revolut, N26 etc). There’s not currently a challenger bank positioning a product for charities that I can find.
This essay takes this idea through four gradually more disruptive versions, from the provision of business tools to existing charities, through to a bank that facilitated giving to a totally decentralised version of charitable activity:
~ 2.1 Banking for Charities: Adapt/extend an existing innovative banking product through partnership with an existing established social/charitable network bespoked to superpower a service for clients in a non-profit niche.
~ 2.2 Charitable Banks: Build a totally non-profit bank from scratch or on Banking-as-a-Service [BaaS], a perfectly transparent bank with generosity at its core. As the variable costs, transaction costs, and necessary overheads generally for a banking product tend to zero, it is ever easier to develop a current/savings account to cater for consumers who only want to do good with their money. Such an enterprise could cover running costs through private donations (as Kiva), corporate sponsorship (as wonderful.org), CSR (as Amazon Smile) or the sale of aggregate data (as MoneyDashboard)
~ 2.3 Virtual Charities: Use a banking app as the coordinating vehicle to formalise distributed gift-receivers into virtual agencies cooperating for impact. Banks in this way become the efficient platforms to build charities on, Banking-as-a-Charitable-Service would be a kit of component parts applicable on demand, integrated as portals on a shared dashboard.
~ 2.4 Citizen Aid: The virtual charity for atomic actions ~ the logical extension of decentralisation is fully distributed charitable agents qualifying for in-situ payments for certified impact actions.
2.1 Banking for Charities
Adapt/extend an existing innovative banking product through partnership with an existing established social/charitable network. Consider the Santander:Osper partnership ~ dovetailed product partnerships between incumbents and disruptors is an emerging solution to mutually benefit the brand+network of both.
2.1.1 Patreon+ANNA
If, for example, Patreon + Team ANNA realised even just a pre-pay card to offer banking admin benefits to Patronees and extended that especially to non-profit entities.
- For Patreon, such a structure would enable Patreon to hold the funds and gain interest as a bank longer term, and to benefit from that cash reserve and data pool. For the beneficiaries (the Patronees, often side-hustlers) would get embedded access to ANNA’s attractive self-employment tools already bespoked for small business.
- For Team ANNA, massive global customer acquisition. New and unique subscription functionalities for their existing customers, bespoked to make side-hustling dynamically bankable — over against other improvised banking products which Patreon’s customers may be using. For ANNA’s incumbent banking clients, the ability to port their business seamlessly to an attractive platform for a patronage model if desired — along with all the CRM, tiered rewards, and global promotional reach of Patreon.
With a small step sideways, this combined product could solve all banking needs for a tiny charity, offering ANNA’s banking with Patreon’s in-built fundraising and recurring-sponsorship. Initially targeting startup charities and social enterprises, such a friendly brand could build out a product that suited larger more complex charities.
So, serving and absorbing the future client base of Stewardship ~ consider a digitally native millennial missionary, or contemporary church planter, or charity startup or social venture ~ the ability to quickly and seamless unite a (miaowing) cashcard functionality with a feature-rich backend integrated with my donor support, in a friendly mobile-native user-interface like ANNA, would be a strongly more attractive proposition than Stewardship.
Giving my supporters a roadmap of deliverables, utilising templates for donor support, employing ML-powered impact analytics about fundraise progress, and having the legitimacy benchmarking of positioning ‘Christian’ work in the robust marketplace of varied other artistic and non-profit endeavours on Patreon would be a really interesting and potentially challenging (in a good way) boost to the shape of mission and the language used in fundraising.
A Patreon:ANNA partnership initially solves a pain point for those non-charity creators currently using a patronage model ~ but could intuitively be extended with eg GiftAid integrated as a feature. Having the support-raising transfer rails of Patreon’s portal linked to a fund-holding-pot function of a banking product opens possibilities of loans and liquidity solutions ~ edging into Kickstarter and Crowdcube territories ~ not just giving pocket-money to craftspeople, but buying an investment stake in a social venture. Patrons and patronees carrying cards that gave access to loyalty, rewards and discounts in a network of sympathetic producers ~ a club of peer-to-peer funders.
If Patreon/ANNA developed a shared-account, the sponsorship model could fund cooperative endeavours.
If the donation rails could pay in and pay out, you could build a productive trade ecosystem of reciprocal giving and receiving, a B2B supply chain by subscription ~ for example, a roastery could link discounts/subsidies to cafe in-network — either for wholesale coffee supply, or as tokens/cashback for mutual patrons. [In the vein of Tail ~ linking banking to cashback for loyalty]
[ANNA is not currently available for charities]
[Patreon business model here; see their current non-profit services here; see Patreon’s mode of tax accounting is an email or manual CSV export; see Patreon example integrations, but not any with eg Xero or other]
[In this vein, it would be interesting to prod the extent to which tax accounting for Kickstarterers is a pain point that could be addressed through an eg. elegant ANNA integration. The predictable lump sum and corresponding expenses are their own quite distinct business problems and they don’t quite the same independent income and variability of Patreon’s sponsorship to solve for. Kickstarter’s tax options are generally to seek third party advice from eg BrassTaxes. The option to export supports as CSV again suggesting this is not a core business tool]
2.1.2 CAF+Pleo
If, for example, Charities Aid Foundation + pleo.io realised a challenger bank for charities.
Monzo, Starling, Revolut etc are all building out business account functionalities from their starting point of personal banking, while others, as Tide, Pleo, etc have positioned a business-first proposition, solving from the start for the challenges of running a business with multiple card users, for generating and chasing invoices, registering expenses, filing tax. I can’t find a neo-bank offering a Treasurer’s Account product suited for Charities or community groups (see survey of charity/treasurer accounts from incumbent banks here).
- For Charities Aid Foundation, by taking their existing current account offering for medium-sized charities, and presenting it in the more elegant in-app team-visible interface for integrated expenses for multiple employees ~you would have a singularly attractive financially-responsive solution to the pain points of their small/medium-sized charities. CAF stands to benefit from Pleo’s young, international and for-business for-profit approach. Particularly the for-business angle would distinguish CAF amongst both challengers and incumbents as the bank not compromising businesslikeness for charitability, but rather super-powering the goodness of all their charity with the whole of banking, the resulting partnership being known for developing win-wins that benefit the spectrum of business ventures, CIOs, BCorps, charities and donor organisations.
- For pleo.io, with a small move sideways, their various tools could serve a non-profit. Incorporating dual authorisation facility, as well as modifying their business tools: submitting-quotations-to-tender becomes fundraising; business-invoicing becomes impact-reporting; tax-return-accounting becomes gift-aid-reclaiming. Through a partnership with CAF, Pleo’s existing user base of creative and conscientious business startups, would be given in-app options to establish non-profit ventures under their own brand, perform tax-efficient giving for their employees and clients, and by extension a partnership would offer the possibility to trial tapping CAF’s network to build matched-charitable-giving pipelines ~ Matched-Giving-as-a-Service ~ (a Toilet-Twinning for whole corporations, speed-dating to find a Toms Shoes for your brand ~ close to B1G1’s catalogue of corporate-linkable causes..). Fundamentally Pleo gets in ahead of the Monzo’s et al as the good guys offering a fully charitable character to their banking product, and so also routs Triodos Bank Nederland et al, if they were thinking to position themselves as such.
So, the above essentially only proposes a challenger bank to serve charities ~ such a product is so easy an extension of existing products for an existing market, it will definitely happen. If Stewardship want to move this way, an MVP could be built reasonably quickly using BaaS via Starling, Fidor, Solaris.. Or they could build it themselves, see:
Pleo ~ users unknown (4800dls/mth) $78.3m raised
Tide ~ 90,000 users, $40m raised
ANNA ~ users unknown (10k+ dls in PlayStore), £15.5m raised
Coconut ~ 10,000 users, £1.9m raised (built on unspecified BaaS)
~ So, for comparison, Stewardship is 30,000 users, £82m turnover, £140m in reserves. (~ figures to confirm?)
[+ since writing this piece originally, I note Stewardship have joined Kingdom Bank reported in The Times as purchasing Kingdom for £7m ~ which is a potentially exciting development, if lacking in detail at this stage. ]
2.1.3 Beyond Banking for Charities.
The above mentioned challenger banks, Monzo, as well as their business account siblings, are banks ~ nominally and functionally banks, and their challenge is posed initially in their simple, slick, on-trend branding and mobile-first accessibility which is a coup siphoning millennial adoption from the big four. But their more proper challenge is characterised by their nimble interoperability within an ecosystem of digital tools which offers a thoroughly augmented customer experience of the bank-as-bank towards a beyond-banking bank as a comprehensive lifestyle assistant and business manager.
The holding of funds for a customer is becoming a trivial part of the bank’s product offering. A bank will be distinguished by the layers of dynamic functionality it can enrich your business with ~ intuitive financial visualisation, granular categorisation of expenses, AI-aided decision making through future cashflow modelling, access to premium wealth management ~ in all, the ability to intelligently manipulate complex financial tools, and to create data-rich relationships with stakeholders, donors, clients and beneficiaries and to plan ambitious charitable projects on the basis of an intuitive and robust financial argument.
Ultimately, the ability to do more with your money as a charity, business, or individual. Taken in sum, this tool kit is a comprehensive business administration suite built inside your banking experience ~ a move is already fundamentally changing the shape of companies — no longer does a small business need a book-keeper, PA, accountant or secretary ~ the back office staff will be increasingly collapsed into a fully automated process.
In the case of charities, this auto-tax-accounting, robotic-fundraising, impact-tracking super-human administrative tool, raises interesting questions about the effect this import has on the character of the organisation, and if/how such a virtual extension can embody the values and mission of a charity, and to what extent this third party insertion is answerable to the ethics of charitable endeavour.
One answer to this question is: 2.2 Charitable Banking: A Banking tool that is itself a Charity. Full stack Charity, running charity on charitable rails ~ what a coup for transparency and authenticity it would be, if the robot running the accounts and fundraising, was itself financed independently by direct donations, this, rather than a for-profit service provided by a questionable third party subsidised by a commission extracted from donors giving to a more primary cause?
Further, such a comprehensive automation of financial functionality presents the possibility of a paradigm shift in the nature of centralised charitable institutions altogether. Having decoupled charitable activity from its financial administration, we could extend this tech into a more hypothetical realm in two ways: 2.3 Virtual Charities: Decentralised Charity formation? ~ If all the roles played by a charity’s centralised office can be automated, could you have a charity that was all fieldworkers? And, 2.4 Citizen Aid: Distributed charitable activity ~ charitable acts without charitable entities? If all processes involved in a charity’s certification and financing were deconstructed as itemised plugins for universal banking APIs, could all acts of kindness be subject to GiftAid through a TaskRabbit-for-social-good sort of mechanism?
2.2 Charitable Banking
Build a non-profit bank from scratch or on BaaS bespoked to serve clients in a non-profit niche, but relevant and attractive more widely to consumers looking for an ethical banking product. That is, build a humble bank, funded by donations, for donations.
Thinking of this in terms of directly competing with Stewardship’s core financial proposition to its core conscientious clientele. There are overlaps with the following existing offerings for thoughtful banking provision:
- There are already Christian banks: Salvation Army’s Reliance Bank, and the less familiar Kingdom Bank.
- There are already ethical banks see Triodos, and Aspiration and to some extent Coop.
- There is already CAF, performing what Stewardship does with GiftAid by also offering personal current accounts to individuals and business accounts for charities.
- There is a mature Islamic Banking sector but it has not brought to market a banking app to compete with the Monzos (yet.. ~ this suggests 5 in development) but it is a sector with perhaps the most significantly resolved framework for usury mitigation.
- And there are Charity-donation and lending platforms which run as Charities themselves on donations only, not through commission/fees (eg. Kiva - operational costs are donation supported and direct loans are 0% interest ~ Field Partners may charge fees but the principle remains) And others listed below in 2.2.2
How big is the market for ethically conscientious customers looking for a biblical and sharia-compliant, non-profit, non-exploitative, donation-integrated, gift-aid-automated, banking facility on their smartphone? ~ Perhaps not massive.
But, I am suggesting there are multiple gaps in the market to position a banking+fundraising product, which might initially only appeal to a niche of early adopters sitting in the Venn-diagram intersection of all the above, but as a resolved product, could take any of the customers from any of the above.
As financial products transition from passive vaults holding funds, to active tools influencing the character of an organisation, able to service complex needs in a business or charity’s operations, I suggest that there are two concerns about money-from-money which are not properly answered by any one player at present:
2.2.1 How a bank makes money from money. 🤑
What does a bank do with the money it holds, who does it lend to and why? There is an existing and growing sensitivity to what industries a bank supports through the money it holds ~ not investing in arms manufacturers, rather investing in green-impact bonds etc.
Secondly, there is a skepticism post-2008, about the reckless business model and opaque accountability of banks in their behaviour as banks regarding what risks they take and who they exploit with the money they hold. This also relates to widespread reckless chaos of sub-prime lending perverting the structure of loan-suitability (Big Short explainers 1 2), so then also the guilt-by-association that is appalled that the Church Of England would hold shares in Wonga.
Thirdly, consider Islamic finance, which would serve an under-banked billion Muslim customers, and has managed to monopolise for itself an ignored-but-also-Christian concern for the abolition of usury. [See Theos’ report on Forgive Our Debts re an issue that Christians could take a lead on]
2.2.2 How a fundraiser makes money from money. 🤑
How does a charity cover the cost of raising the money needed in order to fundraise? To the extent that we are increasingly able to give directly without a mediator, it seems increasingly uncharitable to presume to take a cut from a potentially free functionality. CAF’s 4%, Stewardship’s 3%, Virgin’s 2%+ etc ~ even without disruption from donation tools by tech giants ~ these fees will be brought under scrutiny, because the admin offered can be AI’d, the publicity offered by the platform can be DIY’d, and the payment rails are being put to siege by a dozen challenger banks.
It will become socially icky and very unwoke to merely make money from money ~ as Jesus overturns the tables of the temple money-changers, there is a crisis of legitimacy coming to fee-charging donation platforms and to banks invested in exploitative, or simply non-transparent and non-plain-English, lending practices.
2.2.3 Banking with 0% Commission, 0% Interest, 0% Fees? 😶
The alternative is, for example, Kiva (notes above in 2.2) but not just for micro-loans to developing countries. Such a “Kiva Bank” means to suggest the idea that an entity offering a current/savings account could securely hold your funds, and process all regular transactions, and do social good with the capital, and charge 0% interest, and fund it’s own ops costs by donations alone.
To extend this argument, there are a number of other precedents in this 0% commission fundraising space, see also:
- Wonderful.org ~ all fees covered, sponsored by AWS et al, only release funds monthly (?)
- TotalGiving ~ 0% rates, instant payment, elaborate ecosystem of tools, unclear how costs are covered ~ private sponsorship? Ronnie Zahdeh?
- GiveMomentum proposes operational costs funded by tips only
- charity: water covers ops costs via separate corporate donation structure
- CommonChange separates the funds for redistribution from the funds to cover running costs as a separate donation
- GoFundMe Charity (coming soon) now fully integrating youcaring.com giving funded by tips in recent transformation ~ unclear how the business model washes its face but some info following the press release here: TechCrunch & Business Wire
Such a “Kiva Bank” model seems imperfectly resolved, as it potentially creates volatile risk if the platform is subject to variable donations ~ but, maybe, precisely that vulnerability is vital, good, authentic and attractive.
Also to be addressed, where 0% commission creates a potentially strange dependency on corporate donations, there is an additional, but not unsolvable question about transparency, independent governance and the limits of scalability.
All of this to say, I, as a customer, would love an holistic personal banking product oriented toward generosity+impact resolved with such harrowing authenticity, that it covered all its running costs by the generosity of supporters’ free-will offerings alone — and it attracted that donation exclusively by demonstrating its own intrinsic impact ~ the measurable contribution of the banking product to the charity’s QALY output. As such, I wonder that the CAFs and Stewardships would be terminally disrupted by an eg. Kiva-fronted challenger bank, which was extremist in its transparency, and which foregrounded impact lending above all else that you did with your money ~ with integrity and deepest-possible empathy, the bank itself depending, for it’s own functionality, exclusively on the exact same generosity that the beneficiaries of its charity do.
Such a Kiva bank would address ethical concerns about toxic industries supported, and concerns about usury in one fell swoop. Even a small proof-of-concept Charity Bank could de-legitimate and morally out-compete incumbent platforms by demonstration of a scalable possible. Somewhat as wikipedia raises the bar impossibly for what sort of catalogued information it is competitive for any other encyclopedia to presume to charge for and it demonstrates the scale of community-funded repository people are willing to sponsor financially.
While there will continue to be higher-risk, higher-cost financial services that will be able to justify charging a fee or commission, I venture that it will be a shrinking pool, whose value-add will be scrutinised against what it is possible to automate for.
And so the plummeting cost-overheads for starting and running a bank, will release previously unfeasible selections of under-profitable, higher-risk or lower-return social enterprises as financeable business models viably occupying total investment portfolios for this and for other banks whose customers have an appetite for impact.
Given the currently-under-development nature of these cost-saving mechanisms ~ the overheads are not-yet at zero, I suggest there is room meanwhile for the social investment transparency piece to nevertheless be aggressively foregrounded by all challenger banks, even while some cost-covering via sponsorship and/or a minor level of interest/fees is necessary before the riskier bank-funded-by-donation-only approach is proved.
In sum, the plummeting cost of financial transaction automation, and the encroaching private interests in the donation space, and the change in popular attitudes to money-from-money, will all put a strain on Stewardship’s value proposition. To burn Stewardship’s platform intentionally, CAF, Pleo, Kiva, or wonderful.org should create a zero-commission fully-transparent regular-financial-support product specifically targeting Christians, as an answer to a question donors are already asking.
2.3 Virtual Charities: Decentralised Charity formation via Banking-as-a-Charitable-Service
If all the roles played by a charity’s centralised office can be automated, could you have a charity that was all only fieldworkers?
2.3.1 Decentralisation
There are plenty of cases where this is not applicable, where relationally complex, resource intensive, sensitive work by charities requires the slow built trust infrastructure of a centralised management team. However, there are also many areas of charity where the high cost and high friction of administration is ripe for urgent disruption like mobilising individuals for mission. And there are unprecedented modes of charity which have been unfeasible for centralised administrations, but which the universal adoption of smart phones creates a plausibility to a decentralised approach to, for example, solving food poverty through the visibility of local granular responses.
While certain use cases require fixed centralised single-purpose private office accommodation this has not dulled the rise and rise of coworking on hotdesks in all sectors. While certain events are suited to a tailored and expensive restaurant, this has not slowed the rise and rise of Deliveroo and JustEat. While certain apps need to be bespoked to run off-line, this has not kept SaaS from dominating as the default way software is consumed.
Consider the following:
An agile charity team 👩💼 ➡ ️🦸
With no hierarchy but self-organising governance, a self-constituted group of specialists without a Senior Management Team. A disaster response team convened by funds released from a smart contract triggered by an event. As a marketplace for metricked impact gradually develops, the infrastructure for specialists to tender charitable response bids will favour the competitive edge of disintermediated teams, who are digitally able to maintain a measurable reputation, make complex consensus decisions, create efficiencies and economies of scale, catalogue design patterns and learnings, all without the cost of a centralised institutional brand.
A charitable collective to subvert the gig economy. 🗄️➡ ️🤱️
A cooperative of careworkers, able to record actions, raise funds and be remunerated for the work done on their terms. An employee-owned TaskRabbit for social services. A fellowship like a franchise of plumbers gaining the benefits of scale without the encumbrance of overheads.
A church with no church office. ⛪ ➡ ️🧗
An open-plan horizontal ministry where the priesthood of all believers was equipped to make transparent decisions in the commons, by the commons, for the commons, displaying all financial dependencies and discovering dynamic granular representation in the priorities the total laity felt led to serve. Ecstatic propulsion of a sent sending sojourning Christianity for the great outdoors.
A mutual mission agency with no HQ. 🏢 ➡ ️🌐
A cloud of horizontally interconnected agents able to access the resources of an HQ on-demand, synthesised from a formalised collective of sending churches. Whereby ten churches could send a hundred missionaries, from all for all, neutralising variabilities in personnel, need and volume of donation via disintermediated portal where all financial and physical resource was visible and could be responsively redistributed relationally, laterally, proportionally and not through a opaque bottlenecked gatekeeper.
In all these cases, the non-negotiable necessary function of the former centralised office was financial processing. A mission’s HQ may or may not offer medical assistance, a church office may or may not maintain the social feeds of the website, a disaster response agency may or may not manage legal proceedings for large scale real estate.. But they all must process donations and pay salaries, and probably all must do financial reporting to donors and stakeholders.
Currently ChurchTech and CharityTech builds from a CRM and Comms base, onto which financial tools are appended (see Subsplash or even disruptor Beacon). I don’t think, ultimately, that this is a chicken and egg problem ~ CRM and Comms are after the fact. The real meat of what every charity fundamentally does is the reallocation of resource, receiving and releasing funds ~ CRM supports that, but only in an organisation that has already solved from initial funding, and has made a banking product decision to store that.
A bank-account with dashboard would be the essential platform and ideal vehicle to enable the re-enfranchisement of proper agency into the hands of those called to compassionate causes via charities-with-no-back-office. Through an innovatively permissioned shared bank account, it would be possible to formalise and coordinate all sorts of gift-funded-workers into virtual agencies cooperating for impact.
2.3.2 Themes to reinforce this direction of travel
The shift in the zeitgeist is apparent in a number of movements which will alter what consumers ask of a bank, and what an innovative bank can solve for:
The rise of freelancing. 👩💻
The increasing ability to self-sufficiently automate small business administration into a plethora of self-managed tools, like FreeAgent and Team ANNA, but also the corresponding global pool of interconnected facilities, networks and supporting structures to support this as an viable and attractive total way of life, from learning at Udemy, desking at WeWork New York, recruiting at Upwork, recruiting on Fiverr, selling skills at PeoplePerHour. Negatively this produces a precariat of informally employed and ambiguously committed mercenary agents creating thin and exploitable enterprises. Positively the pool of talent is deep, rich and responsive ~ enabling rapid creative innovation to problems previously too small to solve.
The rise of sharing. 🤝
People, businesses and so charities can do more with less through participation in interdependent resource networks, there is a ZipCar and AirbnbEng for everything, there is a Library of Things. Negatively, these networks promote a rentier class that tears up locality and the textured grain of diverse and subsidiary ownership scales. Positively business, leisure and charity can pop-up instantiations of experimental activity at extremely low-risk.
The rise of impact metrics. 📈
Negatively, this is the bureaucratisation of community and the transactionalisation of compassion, expectations to measure the unmeasurable will create a hype layer and noise, expectations to measure will bankrupt small charities who can’t afford the resource involved in measuring. Positively, impact metrics will create a marketplace for proofs, and gaming visibility in heirarchies of impact, and, as such, the fittest charitable solutions will be rewarded for their innovation.
The rise of IFTTT’s improvised interconnection. 🤖
Zapier, Integromat etc, all hack no-code integrations, making data useful from one platform to another. Fundamentally these seed an assumption that integratability is a primary and that it should be possible to stipulate conditionality to all actions ~ these lo-fi smart contracts are the precursor to properly programmable money. In this vein, see Monzo’s IFTTT saving plugin (eg. if 3.79 spent then put the roundup 21p to savings pot), and see Momentum’s giving triggers (eg. if Donald Trump tweets then give 50p to a specified charity)
The rise of Open Banking’s formalised interconnection. 🔓
The landscape currently favours newcomers in a way that it has never previously. OpenBanking drives this IFTTT approach to open APIs into high-security regulated environments with a mandate goes beyond merely enabling the possibility of interconnection, towards promoting and enforcing PSD2 and beyond. When finally implemented there will be no walled gardens, no monopolies, no privileged gatekeepers to financial services ~ all services will be flexibly available everywhere through the comprehensive dashboardification of the personal banking experience. ~ This is interconnection piece is particularly interesting to the donor-beneficiary value chain involved in all charitable organisations. I will argue that resilient future charities will be built as component services compatible with consumer banking platforms.
2.3.3 Consumer Finance will be just Platforms and Micro-services
In this OpenBanking future, the newly networked landscape of unbundled consumer financial products will accelerate the proliferation of two types network player:
- Platforms like Yolt, or Mint, or Curve, aggregating your financial data from multiple sources to provide one data-rich, insight and control, dashboard for financial consumers.
- Specialists who provide expert micro-services compatible with those dashboards: high interest savings, tailored discounts and custom promotions, personal data-linked insurance policies, localised utility providers, lifestyle subscriptions, loans, and charitable impact giving..
This is how I as a consumer will expect to interact with my personal finances, selecting tailored tools to report into a dashboard of all my finances, each tool unburdened of any baggage of generalist banking, not bloated with next gen PPIs that I don’t need.
The weaponised business models of these universal Platforms and these nimble Specialists leaves little room for medium-sized, under-funded, bespoke legacy services in their siloed logins and inflexible toolset. In the future, there will be no boutique banks, so options for Stewardship and its competitors in the consumer philanthropy market are: Go Big, or Go Niche.
- Either, become the platform/portal for stewarding and synthesising all of a user’s other financial products into one place, and perhaps doing so through the particular lens of generosity maximisation or holistic Christian stewardship. [Could be brilliant. Could be MVP’d by porting all other personal bank transactions to be visible in the existing Giving Account UI ~ a makeshift MyMoneyDashboard targeting missional optimisation. Could be an partnership to extend lifestyle discipleship in a white label product like theChurchApp ~ a tab powered-by-Stewardship to view banking in those interfaces]
- Or, produce a set of reusable, portable, specialist widgets, compatible with the OpenBanking future. Be the provider of best-in-class data for a range of charitable actions with finance, that can be incorporated into dashboards where decisions about giving will be made. Be a ready-made solution for neo-banks to plug into. [Could be an alternatively branded subsidiary that is not “Stewardship” sold as a religiously neutral financial product, apart from its parent company]
(3) Perhaps less aggressively, there is a future in which such as Stewardship, or JustGiving etc, could move sideways to resell middleware solutions for giving-functionalities into other financial providers.
(4) Also, perhaps pragmatically/expediently, such as Stewardship could shortcut dev work and position a “Generosity Bank” as a branding layer over the top of a banking tool ~ a charitable UI built on generic BaaS.
All of this to say, consumer finance is moving in the direction of containered interoperable dynamic tools on generic dashboards. So also business finance, and the administration of finance for charities is also being dashboardified.
2.3.4 Business Finance will be just Platforms and Micro-services
Business Dashboards. Bank accounts for businesses are everywhere moving towards the convenience of accounting tool consolidation through widget innovation and partnership integration. The ability to do everything anywhere; the very visual visualisation of cashflow, P&L, burn-rate and all business analytics; intuitive push notifications; invoice creation and chasing etc ~ these are not premium features, they are hygiene factors in making the banking product choice for small business managers.
Impact Reporting. Given the massive increase in the possibility of business and finance data, this has translated into an expectation on Charities to generate data intensive reporting for donors on the financially efficient achievement of social impact outcomes. This cumbersome onerous burden of proof has accelerated faster than intuitive tools have been introduced, and so, anecdotally charities rely heavily on spreadsheets and defer to consultants (see Eido et al) to provide static retrospective reporting manually at the end of year or, end of funding cycle.
Charity Dashboards and Impact integration. Charities who are not using makeshift spreadsheets to addressing the reporting pain points, have adapted to the questionable efficiency of using multiple dashboards for Comms, CRM, Expenses, Reporting. Looking at Makerble, as a harbinger of the possible ~ and even in Makerble’s attractive and well-integrated, customisable interface, the impact work is siloed from financial functionalities.
- I would venture that, in these processes currently, the banking product is firewalled as a risk rather than an opportunity. With the ability to see accounts, let alone spend from them, strictly limited to an awkwardly permissioned manual process. Banking for charities is already cumbersome and the integration offered is very poor. This is ironic given that the thread of donor funds touches every process in the organisation. This opaque and inefficient disconnection will be short lived as the openbanking potential to port financial figures into third party interfaces has been derisked and well-templated.
- I would venture that, in these processes currently, the financial figures are only exported to donor-visible spaces through a heavily choreographed process of manual beautification. This is both pragmatic and strategic ~ raw data is insecure, messy and easy to misinterpret. The result, however, is de facto non-transparency. Again, this will very soon be an anachronism, given the digitally native way donors are giving through portals which have room for instant feedback. And, also, given the win for both donor and recipient, if accurate and detailed information about the use of funds could be layered in a way to incentivise good giving.
2.3.5 Bypass Big Charity via Donor↔Cause data cooperativisation
Consider that every category of financial activity that a charity performs could be an automated process, which could be delegated to a specialist digital provider who could optimise/streamline/amplify the transaction for efficiency and impact.
Automating processes such as: the filing of donations, profiling of donors for comms, financial reporting, expenses processing, applying for GiftAid, compliance checking, insurance, crowd-funding comms, impact measuring, impact reporting, cross-border payments, supplier management, payroll..
Simplifying extremely, but there is a flow of value and a flow of data, usually highly augmented, round-about and obscured, but there is some implicit feedback loop, even just via pictures, stories and branding, relaying the cost-benefit, informing the donor’s decision to give a one charity vs another charity, and how much to give:
[Donor] → Input Decision → [Charity] → Output Decision → [Outcome]
[Donor] ← Input Appeal ← [Charity] ← Output Measure ← [Outcome]
Conventionally constituted charities have historically been the exclusive hub of financial administration, creating the possibility of other workers achieving social impact through that enabling work of an administrative back-office.
Financial tech exists such that the Charity-as-back-office could be eliminated or at least be radically compressed, and then, further, for any essential visioning, delegating and communication, tech exists to radically redistributed those tasks to the fieldworkers (those outcome agents well-placed to make relevant decisions and tell powerful stories of impact). Equally with the same tech, it is possible to delegate work to the donors as participants (those who would be specially motivated to ‘own’ the vision, and to maximise the value of their contribution, by participating, for example, in GiftAid management, or in other administrative contributions in kind).
So, automated admin and real-time on-site data, means informed donors are able to give and trace and cheer-on the impact all the way through, and those doing the work can respond immediately to needs with fund requests:
[Donor] → Output for Input Proposal+Acceptance → [Outcome]
[Donor] ← Input for Output Proposal+Acceptance ← [Outcome]
Donors, Charity administrators, fieldworkers and final beneficiaries have never been more seamlessly connected. They will only be more connected, and have a greater expectation for connection.
If you created a nimble fundraise-to-impact-dashboard for a Charity with a distributed team, it would only be a technical tweak (and some heavy lifting legally to create a precedent) to enable this to by-pass the centralised administrative core
Creating a stand-alone donation app or isolated web portal or ideological niche Christian bank is postponing the obsolescence of the organisation, in a future there will be no boutique banks, no stand alone financial products, just expert services supplying a network with dashboards at both ends.
2.3.6 Charitable Giving: Stewardship is a Dashboards at both ends
Unlike almost any other banking platform that holds funds, which maybe sent outbound to any variety of heterogenous charities ~ Stewardship controls portals at both ends of an end-to-end transfer.
Unlike any donation platform that is abstract, mediated, and raising funds inbound from hugely heterogenous parties, Stewardship has intimate access to behaviours at both the donation end, and at the recipient end of the chain outlined above.
This is really significant, in the potential it offers to trial layering micro communications, impact-measurement, voting-mechanisms into a pilot.
Stewardship has the ability to completely control how a metric of impact is inputted by the recipient and is displayed for a donor. Stewardship has a captive audience of individuals who definitionally, and exclusively, are banking for impact. Stewardship is a sandbox with laboratory conditions, a 30,000 pre-recruited community with good-will for good works, for whom impact accreditation would be a relevant metric to experiment with the display of. It’s not currently very data rich, and not very porous, but Stewardship is already a dashboard at both ends.
2.3.7 Doing the Decentralising — Hacking a meanwhile MVP.
Consider the various examples raised in 2.3.1 and the peculiar nimbleness of neo-charities which could superpower all the skill and goodwill of its agents to do social good with all the benefits of scale and none of the friction of centralised decision-making. I am making the speculative argument that this form of impact by a fellowship of like-minded charity workers is very close to being technically possible.
(I’ll hope to draw out a Next Steps piece for incubating and testing, in essay #7) On this decentralised charity piece, I would propose to identify existing small charities, mission agencies, churches or social enterprises who have discrete projects which could run in a sandbox. Design some games/hacks to trial with existing platforms to explore what social good and decision-making efficiencies can be won from tweaks:
- Eg. a Revolut Shared Pot linked to use-it-or-lose-it targets ~ pots for communal use with approval voting. Like entering your pin in-app to approve an internet expense, but applied to corporate spends in the way of commonchange.com’s community voting process.
- Eg. a Xero→Makerble integration ~ tag all transactions in impact fields related to a funding targets. And so, in that platform, even crudely, generate 3-dimensionality in the live display of impact against cost+time.
- Eg. a MoneyDashboard summary of accounts live pushed to public page anonymised export ~ somewhat like public Trello Product Roadmaps.
- Eg. run account mirroring with a bank who have a consumer and business products ~ like Revolut. By donating in the consumer app donations tab to a charity also running on RevolutBusiness, I then gain read-access to a subscription feed of the organisational finances of the charity as if it were my own, in the same UI (like flipping to a different currency account)
2.4 Citizen Aid: Distributed Charitable Activity
On-demand in-situ atomic payments for impact actions. A fully distributed TaskRabbit for social services ~ facilitating a redistribution of wealth and opportunity by incent/reward mechanisms for non-constituted crowds to discover and create nationally/globally beneficial social goods.
This is perhaps the most speculative extension, and is a thought experiment for the Charity Commission.
If technology allows that a registered charity could perform almost all of it’s regulatory obligations through automated processes using accounting/banking software and reporting via cloud-based tools used by a distributed team, and so do away with a centralised office, could we go one further, and virtualise the team itself? In this way, any good work by any unconstituted charity worker could be registered as a temporary charitable entity that could fundraise with GiftAid.
Proof of ID. Consider the way one can register for any of the neo-banks without presenting yourself in person to a bank. KYC and AML can be conducted in app, scanning a passport and recording a video. These robust systems are considered sufficient to mitigate the risk of fraud for significant amounts of money. An equivalent ID system, or indeed the very same same banking-based ID system would anchor the recipient receiving charity as a real person with something to lose.
Proof of Impact. Consider the proto proof-of-stake that online reputation systems create to ensure honesty and to incent positive behaviour in forums. Charity law exists to prevent money laundering, fraudulent payments, and other exploitation of the financial subsidy put in place by the government intended to create favourable conditions for those entities pursuing public good. Registration, reporting and corporate penalties for trustees in cases of misuse create a structure which mitigates bad actors. Under the current system institutional charities are the guarantors of appropriate use of funds to achieve charitable objectives that have been previously agreed. In a new system independent impact measurement would supplant institutional accreditation as the guarantor.
Proportional to the size of the sum of money involved, it ought to be profitable for the government to delegate the ratification process to citizen gatekeepers who were themselves audited by citizen gatekeepers. To the extent that the benefits of such granularity can be scaled at no cost, the government (which is we-as-a-society) could direct via infrastructure, and incent via subsidy, socially positive behaviours which it was previously untennable to regulate.
The argument I would make is that it is a banking product which would be excellently suited to this facility. Temporarily creating a certified vehicle for a charitable financial transaction. I’ll try to illustrate this with two examples.
Example 1: GiftAid applicable to certain medical procedures
Popular on GoFundMe, this strange gap that is neither formal third sector care, nor wholly private care, nor government care. There is a clear public good, a measurable type of impact in a supervised setting, the potential to delegate the means of administration to those with an interest to benefit from it’s excellence, and the potential to hybridise NHS/private provision in a way that is democratically transparent, regulated and mutually beneficial.
The current crowd-raising platforms leave much to be desired — being unregulated except in cases of criminal fraud, unsubsidised by GiftAid, uncoordinated and uncalibrated, inefficient and subject to the added tragedy of the long-tail ~ that only certain prominent cases raise an appropriate amount of money, due to the algorithms governing visibility. However, they deftly illustrate a gap in social provision that should be iterated towards, and a form of synthetic charity which deserves proper inclusion in our toolkit for national well-being, and, if balanced well, would be a superb democratic market-place mechanism to help intrinsically inform where the populous is sacrificially willing that their own money and so also the government’s money should be spent especially in difficult cost:benefit cases.
In a world where a single action ~ the performance of surgery, could be atomically registered as a free-standing charity the missing piece is a financial go-between to hold and released funds on a permissioned basis according to automatic rules.
Example 2: GiftAid applicable to any philanthropic project
Beyond the testbed suggested above in Example 1, in the realm of the ready-regulated fixed-item medical subsidy which could distribute charitable agency, Example 2 posits free-range off-grid actions by citizens participating in charitable-status-by-subscription anywhere, for anything, that would have qualified as charitable activity by a formal charity.
The government could register, for example, certain national OKRs which could, for example, be to tethered to UN SDGs. Any actions proving impact could be eligible for subsidy through the existing mechanism of GiftAid.
This proposal doesn’t propose any very radical technology or policy change — using that Strong Customer Authentication which is already mandatory for banking products, and using the existing justified budget for GiftAid, to achieve, by alternative means, those UN commitments already made.
If the government could stipulate a financial deposit or an in-network reputational stake for individuals registering to raise funds in this way ~ the sums of money available as a reward are too low to make the risk of loss for the participant worth dishonesty.
From this simple reward mechanism, it would be feasible to scale direct self-employment across the third sector in shades of charity. The Welfare State could become more like a Distributed Autonomous Organisation with variable membership, but singularity of purpose. This financial dialogue between citizen and government also suggests an alternative to Universal Basic Income for qualifying social contributions
All in all, 2.4’s main suggestion is, that with a small intervention into the flow of GiftAid, it would be possible to powerfully enfranchise citizen aid-workers as self-organising co-owned task-rabbits working for their own synthetic charitable trusts remunerated financially for verified impact. And a banking dashboard is the ideal vehicle for this socially transformative development.
2.4.1 For Comparison ~ see Blockchain Prototypes
Forms of this idea have been substantially, if only prototypically, developed in the blockchain space, see TraceDonate, Alice, LittlePhil. Giving to charity via programmable tokens which can be used to reward behaviours, with all funds traceable as encrypted tokens on an immutable public ledger. The commendable ambitions uniting these various projects seem to be transparency and impact-conditionality. It is questionable if blockchain is necessary to achieve these.
The projects seem to be partly a product of crypto’s hype cycle, and the easy money (circa 2016) which this visible and optimistic movement raised for the development of speculative projects under this banner, partly the academic interest in the conceptual purity of blockchain and the related rich ecosystem of the Ethereum universe of coin exchanges, code repositories, DAOs and other precedent structures useful for remaking charity funding, and partly in the legitimate but extreme use-case where the anarchic and decentralised nature of blockchain allows censor resistance in sensitive contexts — which some aid contexts are.
Blockchain is not completely dismissable as a solution-in-search-of-a-problem ~ there is a growing appetite for impact reporting to distinguish effective altruism from bad actors, and so there is growing need to rationalise impact recording in a way that is efficient to administrate and uncorruptible. In this way, an app running on a DLT offers automation with baked-in impartiality, in way that is hard to guarantee with any centralised solution. Blockchain tantalises what could be built on a steel thread of charity payments ~ a broad base of trust and reputation management, intelligent and automated resource allocation etc..
However, there appears to be prohibitive friction in all stages of the development and adoption. A blockchain supply-chain is definitionally an end-to-end solution, so it faces a chicken-and-egg problem with only marginal benefits and non-trivial upfront cost of developing protocols for various jurisdictions and regulatory environments across unrelated and unincented stakeholders ~ all to manage the transfer of philanthropic funds ~ a difficult species of money likely to carry emotional and moral baggage for both giver and receiver.
My two cents reckons that mainstream finance will digitalise extensively over the next couple of years and the transparency piece and programmable money piece will be solved for by centralised gatekeepers, leaving blockchain maximalists as a curious experiment of history that explored a cutting edge niche, but which found a world too entrenched to migrate to fully decentralised alternative finance. I am open to being wrong on this ~ ref Rhys Lindmark might be the best person to advise.
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Post Script.
So Stewardship. The above is a largely pitch to such as Pleo or ANNA or other, to invite them to angle a product into the under-served gap for innovative business banking for small or large charities and then on the strength of that relationship, to be exceptionally well-placed to launch a provocatively charitable consumer banking product with virtue-signal impact-metric credentials baked in.
Above, 2.1 considers that a banking:charity partnership would be the quickest route to market for such an efficient tool to outcompete Stewardship on the service it offers its typical client. 2.2 considers that a charitable bank would out-ethic Stewardship in the short and long term ~ it would achieve more impact, more transparency, altogether offering better, more holisticly ‘Christian’ stewardship than Stewardship can with its existing tech stack. 2.3 and 2.4 consider plausible disruptions augmenting the formation of charities. Presently, Stewardship, despite currently being ideally placed as a sandbox for such ImpactTech, will be an also-ran, bypassed by corporate banking solutions super-powering new nimble teams and newly enfranchised charitable citizens.
However, all of banking is being reborn right now, and everything is still to play for. Incumbent networks, like Stewardship, have a significant head start on the key commodity, which is trust. Incumbents who own a full end-to-end donation pipeline also have a headstart on developing new ways to enrich the giving experience.
The future which is fast approaching will have no middle-men gatekeepers propped up by commission for GiftAid, so right now is an innovate-or-die moment. It is within Stewardship’s reach to be the Kiva Bank, and in this, to be the player who writes the playbook for fully transparent social impact banking, and to be the one who provides the universal tools that join the dots from donation to impact.
