Most of us will have fond childhood memories of putting a shiny coin into a charity box and being handed a sticker or lollipop in return. This was the case 20 years ago but now it is increasingly unlikely that future generations will get to experience this.
We are living in a society that has slowly become cashless
In 2019, it was reported that only £1 out of every £5 spent in the UK is in cash or coins, with almost half of all card transactions being contactless.
It seems like we are nearing the end of cash donations and charities need to start responding to this shift in consumer habits. As of now, there is a surprising lack of reciprocation. In fact, many believe going contactless is unsuitable for them, and, incredibly, some believe this will have either a insignificant or even negative impact in raising donations. A refusal to change and a fear of technology is also a plausible factor and could be attributed to charities simply not being ready or feeling overwhelmed to embracing new ways of attracting donations.
If the charity sector wants to thrive in the future, it will need to adapt
For example, over three quarters of young working professionals that are likely to have disposal income use contactless to shop at supermarkets and are naturally likely to follow suit in the way they donate. There is a whole demographic out there that can donate but are not being catered for in terms of their preferred method of donating.
A dominantly contactless society is not too far away, and charities are already feeling the pinch. Street donations given in cash have fallen by a massive 73 per cent. A lack of cash in the pocket is more than likely to be contributing to this.
The data is emphatic, and it is being acknowledged. Despite this, one of the reasons the uptake of contactless donations is still slow is the cost of making the switch, which is a valid concern.
How charities can adapt to a cashless society
Thanks to open banking technology, charities can now reap the benefits of online and contactless methods of receiving donations, without having to make a direct investment themselves.
Platforms such as a Pledjar are removing the barriers between charities and donors by connecting them on a smartphone app. Pledjar brings donors to the charities effortlessly by simply giving them the option to round up their daily transactions to the nearest pound and donate the surplus to a charity of their choice. The Pledjar model allows charities to receive small but regular donations with little outreach or promotion on their part, including a ready-made interactive portal to track donations received, view trends and to personalise their page as they wish.
Although there is little information out there behind the behavioural psychology of contactless versus cash donations, the theory is that if people are given set donations amounts to choose, they may become more conscious of how much they’re donating compared with those who reach into their pockets and grab whatever they can without counting it. Even if true, this does not hold weight against the sheer potential to increase donations from contactless donors.
Donors deserve options
The debate isn’t about choosing one or the other, cash or contactless, rather it is about embracing new opportunities to maximise donations. With 1.3m people in the UK without a bank account and a further 2.2m still relying on cash, cash will still keep its place in society for the foreseeable future. However, with 70 per cent of the UK population relying on cashless transactions, contactless donations are simply an option that charities cannot afford to miss out on.