Spare change donated at checkout raises millions for charity: NPR

Recent years have seen a sharp increase in so-called point-of-sale donations, bringing in hundreds of millions of dollars annually. But requests to “bundle” your bill for charity have already taken off.

Josie Norton for NPR

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Josie Norton for NPR

Recent years have seen a sharp increase in so-called point-of-sale donations, bringing in hundreds of millions of dollars annually. But requests to “bundle” your bill for charity have already taken off.

Josie Norton for NPR

We've all been there: The cashier at the store asks if you'd like to donate money to the local food bank. Or the PIN pad at the checkout counter prompts you to collect your payment for charity – while saving a little cash for a good cause.

These “one-stop” campaigns have become ubiquitous in recent years — at grocery chains, gas stations, retail stores and online merchants — and they raise millions of dollars annually for everything from scholarships to cancer research.

In 2022 alone, charities raised $749 million nationwide through so-called point-of-sale donations, a 24% jump from 2020, according to Engage for Good, which tracks this type of charitable giving. And that was only from campaigns that brought in $1 million or more. Although this number was small compared to the approximation $500 billion in estimated charitable donations In 2022, total giving actually decreased that year.

But it's the comprehensive fundraising strategy, first introduced about 15 years ago, that has really taken off in recent years, according to Michelle McCarthy, executive director of Round It Up America.

“We've seen a huge increase, especially since the pandemic,” says McCarthy, whose nonprofit provides legal and financial guidance to for-profit companies that fundraise for charities.

Much of this growth is fueled by customer generosity, but those who study consumer behavior point to other factors as well, including how we think about money and even our subconscious feelings of guilt.

It makes sense (and dollars) to ask for less

Michael Rendos says he “almost always” clicks the donate button on a credit/debit card reader, or PIN pad. But recently, this has begun to change. “I don't do it as much as I used to,” says Rendos, as he buys a bunch of groceries outside a Giant Foods supermarket in Severna Park, Md., near Washington, D.C.

Rendos said he's noticed a spike in the number of orders showing up at the places he shops, and it's getting a little stressful. “Everywhere you go — Taco Bell, 7-Eleven. They all do it.”

The data suggests that despite receiving such requests, Rindos and others like him are giving out more every year at cash registers, self-checkouts and online. This has resulted in a huge boost for the charities on the receiving end. Consider the Taco Bell Foundation, a non-profit organization that operates independently of the fast food chain. It brought in $42 million last year through rounds raised from the company's more than 7,500 restaurants across the United States. Average donation: just 44 cents.

Previously, the organization's fundraising strategy asked clients to donate $1 to the scholarship program in campaigns lasting a few weeks or months. “We've been doing this for many years,” says Jennifer Bradbury, the foundation's executive director. “We had our scholarship program and our community grant program, which funds nonprofits like the Boys & Girls Clubs and Junior Achievement.”

But in 2019, the organization decided to try a different approach. Bradbury says he realized, somewhat unexpectedly, that less is more. “The data we had at that point indicated that customers were three times more likely to donate a dollar,” she says.

She says the results after the transformation were “amazing”: The foundation nearly doubled what it was raising, which averaged between $11 million and $14 million annually, but reached more than $20 million in 2019. The change was very successful, The organization decided to adopt the new strategy permanently. “The number of regular customers who donate every time and rally every time — it's really inspiring,” says Bradbury.

Children's Miracle Network Hospitals, which raises money for children's hospitals, partners with retail giants such as Costco and Walmart, as well as Ace Hardware, Panda Express, 7-Eleven and DQ. In 2022, the network, with the help of its partners, raised $138 million through 78 point-of-sale fundraising campaigns, including fundraisers, she said. These campaigns accounted for a third of CMNH's total fundraising for that year. that Online survey The network conducted it in 2022 and surveyed about 4,000 customers. It showed that of the 88% of participants who reported being asked to donate at checkout in the previous year, more than half said yes at least once.

How you perceive “pain” may affect how much you donate

Why have charitable campaigns proven so successful? Katie Kelting, associate professor of marketing at Saint Louis University, points out that there are some powerful psychological factors at work.

In 2018, Kelting and her colleagues included the St. Louis Zoo in a field study. Instead of asking dining hall patrons for the usual $1 donation to wildlife conservation efforts, the zoo is temporarily experimenting with a round-up approach. Fundraising jumped 21% during the trial, which lasted a few weeks. Kelting calculated that over the course of one year, the zoo would have brought in about an additional $8,000 simply by changing the way customers were asked to donate.

As Kelting explains, a lot of it has to do with the “pain” of parting with our hard-earned money. “There's less perceived pain in the consumer's mind when making that rounded-up request,” she says, compared to asking for a specific dollar amount.

There are likely other factors at play, says Ike Silver, an assistant professor at Northwestern University's Kellogg School of Management. Humans, for example, seem to have a fairly strong preference for round numbers, or numbers ending in zero. a 2013 study I looked at purchases at self-serve gas pumps and found that 56% of them ended in a round dollar figure — far beyond mere chance. The same study noted that in restaurants, many people prefer to leave tips that give the final bill an approximation.

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“It's like an effort-minimization strategy, where people are better at rough numbers and intuitively prefer to work with them,” Silver says. “This manifests itself in how much you want to pay and how much you want to buy.”

More importantly, he says, charitable requests at point-of-sale can turn an ordinary purchase into an ethical quandary. “It becomes an opportunity to signal to yourself and others that you care,” Silver says. If approximation is required, he says, it becomes an ethical test. “It's such a low-key request that saying no starts to trigger slight feelings of guilt.”

Customers may also change their behavior and perceptions in public versus private spaces, says Kelting, citing a body of research by others. In this case, self-payment is similar to a private situation where it is easier to refuse, but the same decision before the cashier – especially the one who adds a verbal claim for a donation – is something different. “When you're out for a long period of time with the cashier, with everyone around you, it's very much like this public space,” she says.

Round It Up America's McCarthy says the data supports that thinking. “Customers appreciate being asked, so this prompt at checkout makes a difference.”

But Kit Lamberton, a marketing professor at the Wharton School at the University of Pennsylvania, warns that there is a potential downside to all this. She says customers may feel they are being manipulated and may end up “feeling resentment towards the source of the manipulation” – the retailer collecting the products.

Shoppers want to know where their money is going

Paula Nichols says she never taps “yes” on the PIN pad when it asks her to collect her bill. “Does this make me a bad person?” She laughs as she loads groceries into the back of her SUV at a Giant Food supermarket in Maryland.

Not that Nichols is thinking of donating to charity. She says she supports a local non-profit food bank and is friends with its president. “We do a lot with them.”

But when it comes to surrendering in the checkout line, she's careful. “How do I know where that money goes? And the prices of food? I just spent like $200 on this,” she says, nodding to the groceries in the trunk.

In 2022, a CVS customer filed a claim lawsuit against the drug chain alleging it improperly used funds raised through point-of-sale donations to fulfill its pledge to the American Diabetes Association. In a statement to NPR, the pharmaceutical giant said the lawsuit was dismissed in September 2023, which “allowed CVS to complete its National Diabetes Month in-store campaign, which raised more than $10 million in donations for the American Diabetes Association.”

Round It Up America says its agreements aim to ensure charities receive more than 90% of the money raised, and charities can spend no more than a quarter of donations on administrative costs. McCarthy says her organization gets up to 7% “to cover our legal and financial costs” and stores can get up to 2% to cover credit card transaction fees.

“Consumers deserve — and state attorneys general demand — transparency and assurance that donations go where they are advertised and intended,” McCarthy says.

Save the Children is one organization that has made extensive use of point-of-sale campaigns, including zoom orders. “We can try to influence [the message] “Put that PIN pad on or whatever the store clerk says,” says Dan Pierce, who is in charge of nonprofit corporate partnerships. “But… operationally, they have to make sure it works for them. So they have the final say.”

Ride-sharing company Lyft is running a campaign that helps customers take a more thoughtful approach to giving. Passengers can choose from a list of charities on the company's app. Then every time they ride, their bill is automatically rounded to the nearest dollar for the charity of their choice.

“If you went to your profile in the app, it would say something like, ‘You know, I gave X number of times’ to remind people that this was okay, even though it was.” “50 cents here, 20 cents there,” says Jeremy Baird, the company's chief policy officer. “It's been a huge success for us.”

How much is too much?

Despite the growing success of point-of-sale fundraising, including blanket solicitations, there is a risk that customers will become overwhelmed by these ubiquitous campaigns. “I think you have to be very careful because a lot of people find these things annoying because they have nothing to do with what they're doing at the moment,” which means buying, says Lamberton, the Wharton professor.

Kelting also says this may be an issue worth examining. “You may have donated yesterday [but] I forgot to buy milk.” So, you're wondering what happens if you come back the next day to buy that carton of milk. Are you less likely to pay your bill the second time?

Another potential downside? Lamberton says quick point-of-sale donations may not do much to create any meaningful connection with charities. Donating your virtual pocketbook to a cause might get an ego sugar high — but it fades quickly.

“It's hard to stand outside a store and ring the bell asking for donations, but what you get is a lot of exposure,” she says. “So you build familiarity.”

“The people who interact with you probably have very positive dispositions toward the charity already,” she says in the face-to-face solicitation.