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Shopkick: A Spoonful of Profit Helps the Charity Go Up

RP Siegel | Friday July 29th, 2011 | 0 Comments

We were taught in school that the shortest distance between two points is a straight line, but that is not always true where human nature is concerned. Let’s see how this works. This is a story of a non-profit that found greater impact when it switched to a profit based model.

The folks who started the non-profit Causeworld wanted to find a way to raise money for charitable causes. So they put together a mobile app that provided a way to “bring the physical and virtual worlds of retail together.” By “checking in” online with companies as they visited their stores, customers received “Karma points” redeemable for donations to charity organizations. The application linked shoppers to the stores and product manufacturers.

Retailers and manufacturers lined up to sponsor the program, since it gave them an easy way to engage with customers. The app also proves popular with shoppers, since special offers and coupons arrived on their phones while they are in the store. So the program’s popularity grew. As of April, the program was sending around $100,000 per month to a selected group of charities.

This got the folks at Causeworld’s parent company, Shopkick thinking that they could do ever better (both for the charities and themselves) if they changed their business model to emphasize the part that seemed most compelling.

The new model, which is embodied in the new app, simply called Shopkick,is a for-profit business that focuses on giving away free stuff and guess what? It’s far more popular than Causeworld ever was. Customers using Shopkick now get Kickbucks instead of Karma, which they can redeem for all kinds of free merchandise, or they can still choose to donate the credits to charity.

There is no data available on the actual dollars contributed with both apps, though we do have data showing that the number of charitable donations has increased.

These examples were recently given in a Fast Company article about Shopkick.

A carbon offsetting project:

  • CauseWorld: 2,133 donations per month
  • Shopkick: 2,673 donations per month

A charity to prevent child abuse:

  • CauseWorld: 667 donations per month
  • Shopkick: 1,257 donations per month

A breast cancer charity:

  • CauseWorld: 533 donations per month
  • Shopkick: 964 donations per month

The amounts to 46% more donations through the for-profit app. It’s possible that the amounts could have been lower, possibly even considerably lower. Since we don’t have the data, we can’t say. But I could imagine that perhaps whatever is left over after an item is “purchased,” that the remaining points are donated, much as one might toss spare change into a charity jar sitting beside a cash register. Still, as the popularity of Shopkick has soared, (it was recently named as one of the top ten most innovative companies in retail) this could be another case of comparing a large percentage of a small number with a tiny percentage of a very large number.

All indications point to the for-profit model being more successful. This is consistent with the experience of Tom’s Shoes as well. Tom’s, who gives away a pair of shoes to a child in need for every pair sold, recently gave away their one millionth pair. CEO Blake Mycoskie told Fast Company that they would have not been nearly as effect as a non-profit.

So, it would seem that the shortest distance between consumers and charitable giving is not necessarily through not-profit organizations.

RP Siegel is the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water.  Like airplanes, we all leave behind a vapor trail. And though we can easily see others’, we rarely see our own.

Follow RP Siegel on Twitter.


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