TORONTO
In a move that could funnel millions of dollars in new donations into the hands of Canadian charities, the Bank of Montreal (BMO) and ChangeIt, a Waterloo-based fundraising and financial technology company, announced a partnership that will allow BMO MasterCard customers to round up their electronic transactions and direct the difference to any Canadian charity.
For a typical BMO customer, those extra nickels, dimes and quarters could add up to $180 a year, Nick Mastromarco, BMO’s Director, Loyalty and Partnerships, said at a press conference Thursday at Toronto’s Hospital for Sick Children, whose foundation has a long-standing philanthropic relationship with BMO. “Our customers want us to be part of the solution.”
The arrangement, the first of its kind involving a major Canadian bank, represents the culmination of seven years of effort by ChangeIt founder and Chief Philanthropy Officer David Beaton and the firm’s CEO, Mike Kitchen, a former senior BMO executive.
“ChangeIt is really an innovation in fundraising, moving from giving spare change to the way Canadians like to pay,” said Kitchen, who described it as “the new standard for small change philanthropy in an increasingly cashless society.”
A recent Pollara survey conducted for Visa Canada in 2013 found that 71 per cent of Canadians donated to charity last year. More than half said they wish they could have given more and 24 per cent said they would have given more if it was convenient to do so.
Kitchen estimated that if six in 10 Canadian credit card payments could donate the rounded-up amounts from each transaction to charity, it would add about $1 billion to Canada’s total philanthropic outlay per year.
Small change donations to boxes next to cash registers are no longer a prominent form of philanthropy in Canada. In recent years, retailers like Loblaw, Canadian Tire and Indigo have taken the point-of-sale approach to another level, as cashiers ask customers whether they’re interested in topping up their bill by a dollar or two to support a partner charity.
Kitchen pointed out that the ChangeIt platform allows charities to tap into these kinds of programs without the often-awkward solicitation. Consumers enroll their existing BMO MasterCard in the program and then use their card as normal. Their donations are automatically directed to the charities of their choice, and can also select a monthly maximum. Participants receive annual tax receipts for 100 per cent of their contributions. The technology allows BMO to aggregate all the top-ups in a given month into a single line item on a customer’s credit card statement. ChangeIt’s mobile platform also allows users to make one-time donations.
ChangeIt charges charities a fee of 6.9 per cent of total donations to deliver the program plus some additional services, a rate Kitchen said is highly competitive. Conventional fundraising costs, which may include fees paid to outside campaigners, generally soak up about 25 per cent of philanthropic revenues.
At present, Kitchen said he’s not aware of another North American firm with a comparable technology platform. The company has full U.S. patent protection on its processes and a pending Canadian patent. BMO, meanwhile, is looking to expand the service to its U.S. banking subsidiaries. Kitchen said he expects to have ChangeIt in place in the U.S. before the middle of 2015.
Representatives of charities at yesterday’s announcement predicted the technology will allow them to up their fundraising game. Jay Hooper, Vice-President of Development for World Wildlife Fund Canada, said the BMO partnership has “tremendous potential to increase the power of our donors.”
Kids Help Phone President and CEO Sharon Wood added that supporters of the 25-year-old counselling and support service don’t have the means to make large donations. By facilitating smaller but directed donations, Wood said the organization will be better positioned to underwrite the cost of delivering counselling to about 500 children every day.
“That’s the change that’s been mobilized today,” she said.
According to Kitchen, ChangeIt presently has marketing arrangements with about a thousand charities, but the BMO partnership, which the bank plans to promote as a point of differentiation from other financial institutions, has been structured so the small-change contributions can be directed to any registered Canadian charity.
