The Product that Generosity could be: GiftAid API
RegTech for Virtual Charity Formation [Challenger 1 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
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 1: Charity RegTech for GiftAid
Stewardship should be displaced by plug-in-and-play automation of GiftAid via an API bridging charities, government, digital banks and social media platforms. By automating both the financial transfer involved in Gift-Aid-claiming and the verification processes involved in Charity registration, the friction for constituting and running a charitable entity would tend to zero and whole new possibilities of nano-charity would be possible.
~ 1.1 Gift-APId It ~ Gift-Aid-at-the-point-of-donation as a fundraising plugin for all ~ built by Charity Commission or a third party.
~ 1.2 How Government, Big Tech and everyone could use an API as a win-win-win
~ 1.3 What Virtual/Hybrid Charity could be enabled by such a platform.
1.1 Gift APId It
1.1.1 APIs to OpenBanking
An application programming interface (API) is an interface or communication protocol between a client and a server intended to simplify the building of client-side software. It has been described as a “contract” between the client and the server, such that if the client makes a request in a specific format, it will always get a response in a specific format or initiate a defined action. (wikipedia)
Simply put, digital money is a set of databases listing units of value against users. APIs allow a third party application to request that information, and to modify it by permission. The most obvious use for this, is in the account aggregators, like Yolt, who import various bank accounts into one display of all your money, in goings and outgoing.
This interoperability will become universal and mandatory with OpenBanking and PSD2 etc as regulators, Bud, Plaid, etc as the plumbing, Stripe, PayPal Engineering as glue, MoneyDashboard and the neo-banks as the ports of access ~ altogether are defining a landscape where arrays of specialists can serve micro-services into personal finance dashboards.
It is becoming frictionless to hold a host of personal financial tools in one place, provided by experts, linked by open APIs. GiftAid should become one.
The days are numbered of GiftAid being an administratively burdensome. error-prone, slow and vulnerably corruptible process by charities and potentially fraudulent charities.
The process of adding GiftAid to your donation deducted out of your tax bill directly to a charity of your choosing should be in your control, so it need not be an administrative burden for charities (disadvantaging the smallest), via a facility that should need no middlemen (whose value extraction is a fee that should be bypassed), the payment should be payable instantly (all links in the chain have been digitised), and the processes should need no data double entry ~ least of all for those higher-rate tax payers looking also for a deduction in their end-of-year tax, and corporate donors optimising at scale.
1.1.2 Donor-Pushed vs Charity-Pulled GiftAid
The GiftAid additional funds are currently pulled by charities from HMRC, rather than pushed by donors. In this sense, strictly speaking APIs already exist (See info gov.uk/claim-gift-aid-online which enables APIs like JustinBusschau/hmrc-gift-aid and Beacon’s explanation of why it’s hard, while not yet apparently functioning for GiftAid, gov.uk PAY is built openly towards devs extending its function: docs.payments.service.gov.uk). GiftAid, in these, is currently a charity-facing service, I have not found the sort of donor-facing service, or in-bank widget that I have in mind. It has only very recently become even technologically feasible to position such facility in the hands of the donor. It has, by necessity of its complexity been an administrative task centralised at the charity’s office in their accounting process.
Donor-Pushed is more Feel-Good for the Donor
Donor-pushed GiftAid, financially would be an identical transfer: same funds from same govt pot with same necessary permissions, but psychologically, if the GiftAid was added at my end, it would feel much more like I was giving more, than that merely they were getting more.
[I speculate ~ the effect of the perceived agency of GiftAid on psychologies of giving would be an interesting study (even, cynically simply to modify the UI of existing giving platforms). In this line of research, see slightly inconclusive, or at least phlegmatic: GiftAid’s value for money and the impact of tax relief on giving numbers.]
Donor-Pushed results in smarter giving
If the donor were made the agent for this, without phasing a transition, initially this might negatively impact charities as a fall in donations during migration. But ultimately positioning a conspicuous matched-giving dial inside banking products, ought to lead to increased giving simply through increased visibility at a place where donors are at their most informed and equipped to give. Further, such a reversal would advantage significantly those smaller charities for whom GiftAid admin is proportionally more resource intensive.
Donor-Pushed looks better for the Government
If the donor were made the agent for this, the government would gain great optics as the perceived champion of these causes, but more importantly the citizen participation in a dialogue between government and the granularity of subsidisation would be a win for democracy and community, and hopefully not merely a PR coup for the party in power at the time.
Donor-Pushed improves democracy’s interactivity and granularity
If the interface were created for the donor to be the agent of GiftAid, all sorts of other functionalities could be incorporated into the conditional giving portal. The scope of GiftAid is currently under-realised as a potentially far-reaching behaviour incentive mechanism ~ a similar conditional reward structure could apply as a carrot to incent all manner of civic contributions. Currently GiftAid, as a brand of government manipulation, is very positively associated ~ people love that aspect of government that gives free money to causes they care about, and so, which such a universally accepted sugar coating, this mode of identity and expenditure tracking has great potential to be expanded without seeming like government behaviour control. GiftAid+ could be woven in to all social services as a programmable subsidy, an IFTTT HQ for citizen-government interactions:
1.2 Who would build this API?
1.2.1 Government’s incentive to build/adopt Gift-Aid API
It is in the government’s own interest to have this process happen where they can control the transaction, own the data, and manage the recipients directly. So it seems plausible The Charity Commission will do this themselves — in the Open Banking and Open Government drive to make all such functionality generic, universal and transparent (Open initiatives eg 1 2 3). GOV.UK Pay could build on the same rails that currently allow financial inward payments from dispersed tax payers to government ~ to then repay that tax to dispersed charitable entities in a seamless, frictionless, universally familiar, universally accessible interface.
API as a win-win for the platformification of government. Government should pursue an approach like Stripe and create brilliant tools for to resource, super-charge and deftly coordinate independent developers who are building the otherwise private platforms of a digital society.
Front End. Enabling citizen/consumers to intuitively interact with government, in a rewarding, low-friction way, on the platforms they are already comfortable in — should lead to wins for all, greater government trust, greater government accountability, greater financial literacy and democratic in the population at large.
Back End. Having a friendly, open, back-of-house portal for tax payments, deductions and reimbursements will allow other platforms and their respective developers to support the cause of good government, by participating as the good-guys, champions of the common good.
To avoid the political controversy of one monolithic digital government identity system, there is a lighter weight but effective, portable identity, which would be essentially an exploit of OpenBanking, such that the same protocols which allow you to see your Monzo balance in your Mint dashboard, would also allow you to see you HMRC tax bill and FacebookFundraise giving in the same dashboard.
To the extent that this movement of money is kept safe and transparent, the government stands to win in policing fraud, reducing the friction in government revenue, and in optimising their approach to tax and expenditure. And if this can be performed by an invisible integration to emerging Fintech — rather than a separate siloed, crudely centralised ID-card/monitoring system, there is the potential for the population and the government to gain the upsides of such a system, along with the perceived and actual enforcement of checks-and-balances both to government and to big tech.
1.2.2 A specialist third party’s incentive to build Gift-Aid API
Equally, a non-governmental disruptor in this space, would stand to gain the valuable stable income of government(s) as a client through a privatised provision of an augmented government service if they can out-innovate the State’s incumbent internal provision, furthermore they would stand to gain charitable entities as business clients of a banking service provision. But ultimately, if they can create the infrastructure for decentralised virtual or hybrid charitable entity formation — the disruptor in this space stands to gain unlimited consumer adoption of a related banking product .
The add-Gift-Aid function, which is such a significant part of the Stewardship value proposition involves significant bureaucratic friction. For Facebook, the compliance verification would be bespoke to every national jurisdiction, and carries certain variable risks, particularly reputational risk, which might be safer out-sourced.
Rather than building in-house, the multi-stakeholder needs and multi-client benefits might better suit an external third party to be a universal Regtech client serving all Fintechs, banks and otherwise with GiftAid-certification-as-a-Service or Tax-Deductability-as-a-Service.
This third party would generate value/income through:
- Service charge to Charity Commission for administration outsourcing
- A fee from Tech Giants and other portals who use the API so they can be the Gift-Aid good guys ~ so GiftAid, bundled with Impact kite-marking offered through SaaS subscription.
- A registration fee from new/existing charities for seamless setup ~ this is a two-way marketplace, selling a robotic fundraising service to charities, but transparently as a one-time fee, not as a perverse commission on all future funds raised.
- A registration/transaction fee from high-rate tax payers, for reporting for personal tax-relief on giving through that API.
- A fee from HMRC for access to individual or aggregate data to steer budgetary decisions in the light of donor behaviour patterns.
1.2.3 Big Tech’s incentive to build/adopt Gift-Aid API
API as quick-win perception management for digital society’s giants. The meteoric rise of the tech giants to universal adoption and pervasive omnipresence is a given. Stewardship acknowledges that we live and give through our phones, but more significantly than that, we live inside privately managed comprehensive information environments within those phones. Facebook, Google, Amazon ~ these are not apps like other apps ~ in terms of the sheer area of life they cover and the innumerable functionalities they contain, and their active, totalising ambitions. Strengths and Risks:
- The tech giants hold an extensive amount of your personal data which you use to conduct life, increasingly financial in its ability (see GooglePay, Facebook’s Libra cryptocurrency, Apple’s Marcus Credit Card etc).
- The tech giants are the portal through which you transfer data and value (messaging, cloud storage and sharing, payment for services and financial products)
- The tech giants are your public facing profile, the location of your self-understanding and self-presentation ~ listing your credentials, achievements, preferences etc into a competitive environment. (Amazon Seller ratings, Uber driver ratings, LinkedIn peer endorsements, Airbnb host and guest reviews etc)
- The tech giants’ key business risk is public perception ~ managing their brand of do-no-evil (vs techlash, vs Uber boycotts, vs Airbnb bans, vs #deletefacebook etc)
Of those four points above, Facebook Fundraiser is an intuitive use of the platform’s strengths of financial functionality, social network access, virtue signal broadcast to then mitigate the public negative perception of Facebook by using precisely those strengths as an unparalleled vehicle for charity so to positively and authentically influence the user’s perception of the platform itself.
Currently you can fundraise for listed charities without a fee, and you can fundraise for personal causes for the cost of transaction only. Facebook can notify a request to add GiftAid if the charity has the function, but does not administrate it (FB and GiftAid FAQs).
With such a tool to game giving, Facebook could further extend the reach of its ability to amplify good causes by adding basic tools to its existing Fundraiser product:
- Initially — Seamlessly and conspicuously adding the GiftAid inside the Facebook UI, so that I strongly associate best-practice efficient generously assisted giving with my otherwise prosaic and self-interested Facebook experience.
- Incentivising (by matching/rewarding as you give) the centralising of all your giving by providing a pot-function so Facebook is the hub for all your various existing giving — a very similar feature to Stewardship’s Giving Account. As many of the disruptor banks have begun as pre-pay cash cards — there would be many functions such a pot function could have within Facebook. Beginning the games related to acts of financial kindness, the infrastructure and user-familiarity is built for a full range of financial services to seem natural, attractive and efficient inside the facebook experience.
- Incentivising more informal altruism by enabling no-fee zero-commission giving to other non-charitable entities ~ perhaps with some condition (at a cost to Facebook, but in a move that would sink all competitor GoFundMe platforms).
1.3 Virtual/Hybrid Charity formation
If you can solve for tax-efficient giving and the admin of charity formation automatically — the next logical step would be to displace the centralised gate keepers — the charities themselves, and allow virtual teams of charity workers — self-organising agile teams of field-worker-only impact driven teams of social care.
The above value proposition could be profitable on its own. However, the direction of travel for such a tool realises its full potential when this certification scheme extends its reach beyond accrediting existing charitable organisation to accrediting a vast spread of energetic but informal altruistic activities, projects, communities.
By analogy, where a hotel listing service usefully vets and centralises information on available beds, Airbnb realises and accredits the latent bed potential everywhere. So then this certification extension realises and accredits the latent charity of everything.
The government makes Gift Aid available based on the economic case that government funding distributed in this way is a cost-effective way to maintain society’s wellbeing — that would otherwise be paid less effectively through Schools or NHS.
There are low-risk examples this could be piloted with as an economic game in a sandbox by vetted candidates, eg. certain private medical operations commonly crowdfunded could be specifically approved for individual gift-aidability ~ to establish how such an option influences donor behaviour and social impact.
So, in the near future:
~ You don’t have to Be A Charity to Do Charity.
~ Anyone can fundraise for anything.
We should technically be able to realise the atomisation of charity down to the individual activity ~ the result being the totally distributed charitable entity — where everyone can be a charity worker. In a way similar to the self-certifying KYC/AML that you can do on your phone when you open a Monzo or Revolut account — it is possible to distribute even sensitive regulatory tasks. Certificating it with a self-policing creditability/reputation mechanism, and then immediately fundraise for that on your facebook page, and get GiftAid with it.
So then the freelance charity worker, missionary, occasional youth-worker, one-off soup-kitchen or other can instantly position itself as a temporary charitable entity and so raise funds, do good, and never touch Stewardship. Unless Stewardship was this startup.
Post Script.
I say the above, as if this lean widget startup needs to be bootstrapped and wait out a change in government policy. However, Zuckerberg could personally bankroll a matched-giving scheme akin to a private GiftAid, to catalyse generosity behaviours by non-linear rewards to the most generous on his platform.
Tailored appropriately, especially with a handful of high profile human causes and lives changed by every-day donors, and with numbers to paint the groundswell of popular generosity on the platform, the optics would be devastating on the next occasion he has to stand in front of the Senate, he would be able to say that Facebook makes money by selling ads, and that Facebook returns social good that outstrips the government provision in a whole list of aspects of society ~ and this, not to say only that Facebook’s giant war-chest has dolloped cash on a project, but that the killer combination of Facebook’s wealth and it’s peculiar ability to broadcast granular needs and its ability to reward granular positive behaviours.
Stewardship could still be that Proof of Concept. Stewardship could be the one to build open sourced developer tools for GiftAid and all other matched giving functionalities, motivated that it should be ChristianTech that demonstrates to the world what is possible with consumer-facing, automated and in-dashboard GiftAid visibility ~ that or Blackbaud can do it.
