FinXTech’s Need to Know: Charitable Giving Platforms

In the wake of disaster, people give back.

Less than twenty-four hours after Russian President Vladimir Putin announced a “special military operation” in neighboring Ukraine, Ukrainian-based charity Come Back Alive received over $673,000 in donations — $400,000 of which was in bitcoin. At the time of this newsletter, over $50 million has been donated to Ukraine in cryptocurrency.

Whether it’s a global catastrophe or an organization closer to home, U.S. consumers want easy ways to give to the causes that are important to them. Banks are in a perfect position not only to highlight local charities for their customers, but also to facilitate donations to them in a safe, efficient and trackable manner.

And financial technology companies can provide the software to make it possible.

Fintechs that specialize in charitable giving help embed donation capabilities directly into a bank’s digital banking platform via application programming interfaces (APIs), avoiding lengthy core integration timelines. Once live, bank customers can choose which charities to give to, how often they donate and, of course, how much.

Charleston-based in/PACT offers a white-labeled giving solution for banks called GoodCoin. GoodCoin allows customers to give in multiple ways: one-off donations, recurring gifts (monthly, bi-weekly, etc.) or “round up,” which rounds up a user’s card payments to the nearest dollar and donates the change.

These fintechs also keep track of each customer’s donations for the year. Users can access exportable receipts during tax season, or whenever a donation is made. And using a giving-based fintech allows users to access how much they’ve given starting at the start of the year or since they started giving so they can track their impact.

Pinkaloo, another charitable giving platform, operates accounts for charitable donations that are similar to a health savings account. Customers can fund the account, donate to a selected charity and immediately receive a tax receipt for the transactions — all under the bank’s brand. Customers can even convert their credit card rewards points into charitable dollars.

On a larger scale, CyberGrants, which was acquired by Apax Partners in June 2021, helps banks to manage, track and report on all of their corporate philanthropic efforts. It also has a front-end interface that allows employees to sign up for payroll donations or track volunteer hours and nonprofits to apply for bank grants.

Here are four customer- and bank-facing benefits of implementing a giving-based fintech:

  • It provides audit-ready, real-time and exportable tax receipts. All of a customer’s giving lives in one place. Banks can even use certain platforms to track enterprise-level giving. 
  • It promotes giving, locally and globally. There are over 1.5 million 503(c)3 nonprofit organizations registered with the IRS. in/PACT has over 1.2 million of them on its platform for users to search and donate to. Banks can also use the platforms to match customer donations to specific charities.
  • It can realign or reinforce corporate philanthropy. Collecting donation data can show banks what charities or causes are important to their community. They can later choose to incorporate or emphasize those organizations into their corporate giving strategy.
  • It drives digital engagement and brand loyalty. Consumers like aligning themselves with brands that provide opportunities to give back (and give back themselves). Having a donation platform as an integral part of a mobile banking experience can keep customers engaged and coming back.

Banks that implement a giving platform can help customers increase their charitable donations on their time and dime.

Pinkaloo, in/PACT and CyberGrants are included in FinXTech Connect, a curated directory of technology companies who strategically partner with financial institutions of all sizes. For more information about how to gain access to the directory, please email finxtech@bankdirector.com.

How Innovative Banks Fight Covid Through Giving

Charitable initiatives are not new to banks.

Many have foundations, donation-matching programs or standing committees dedicated to giving back. What is new to banks, however, is how fast they’re being expected to contribute to vital causes while juggling other time-sensitive priorities created by the Covid-19 crisis.

Launching an impactful, Covid-specific relief program could be a non-starter for banks unless they leverage technology to make it happen quickly. Two Northeastern banks have proved that it’s possible to spin up new products and programs in days with the help of fintech partners.

As the extent of the Covid-19 crisis became clear, the Community Engagement Steering Committee at The Cape Cod Five Cents Savings Bank, a unit of Cape Cod Five Mutual Company, kicked its planning into high gear. The committee includes employees from different areas of the Massachusetts-based bank.

Before Covid-19 struck, it convened on a weekly basis to plan community initiatives and review applications for support. Now, the committee needed to move quickly to help local healthcare organizations battling the virus on the frontlines. That goal led to a partnership between the bank and Pinkaloo, a charitable-giving fintech the bank connected with at an industry event last year.

Pinkaloo had been presenting to the bank’s internal teams since January, but the arrival of Covid pushed Cape Cod 5, as the bank is called, to formalize the partnership. “Speed to market was important to us because of the emergent need,” says Stephanie Dennehy, chief marketing officer for the $3.6 billion bank.

In a week, the fintech and bank launched giving portals for seven different healthcare providers in the bank’s footprint.

To make it happen, Pinkaloo stayed in close contact with the bank’s team and everyone — from information security to legal to executive leadership — worked quickly to streamline the implementation process. The result was that a vendor management program that would normally take two to three weeks was completed in two to three days, says Adrian Sullivan, the bank’s chief digital officer.

Covid has showed banks that they can move fast in exigent circumstances, but will those lessons last beyond the current crisis?

Sullivan thinks they will. “The way we’ve done things remotely and in such an expedited fashion — I think that becomes new normal,” he says. “We realized how fast it really can be done, so I think we will shift for the better and start to work in a more agile fashion.”

To the southeast of Cape Cod 5 is a single-branch, digital-first bank that’s no stranger to iterating quickly. Quontic Bank, based in Astoria, New York, chose to support relief efforts with a new savings account.

The Drawbridge Savings account pays depositors an annual percentage yield of 0.50% on balances up to $250,000; the bank matches the interest paid on these accounts with a donation towards its #BeTheDrawbridge campaign. The savings account approach made sense to Quontic. They didn’t want to rely on a transaction-based account when people are changing their spending habits and stockpiling funds, says Patrick Sells, Quontic’s chief innovation officer.

To make the idea a reality, Sells put in a call to one of the bank’s existing technology partners, MANTL. MANTL’s account-opening solution automatically books new accounts to the bank’s core. MANTL engineers worked through the weekend and delivered the new savings product in three days. The bank’s team worked all weekend too, preparing disclosures, developing marketing plans and completing all the other steps required to bring the new financial product to market.

Although the stakes are higher in times of crisis, the $395 million bank is used to working in an agile manner. “One of the core values that applies here is progress, not perfection,” says Sells. “Striving for perfection so often gets in the way of progress, and especially quick progress.” Quontic can pivot if it makes a decision that doesn’t work, but the bank recognizes it can’t make any decisions when it’s frozen in the planning stage.

Covid-19 is changing the world quickly. Banks that want to help will need to lean on technology to put their plans in motion fast.