Shoppers are gaining more options for triggering donations at the point of sale, with the latest program coming from American Express.
The card network is beginning a 12-month pilot of Amex Round-Up, which it announced Thursday. The program lets customers round up any transaction to the nearest $1, $5 or $10 and route it to a charitable organization of their choice.
The Amex Round-Up program was developed in partnership with Philanthropi, a "giving-as-a-service" platform the card network has invested in through its Amex Ventures arm.
The Amex program aims to customize the experience of generating credit card-based donations, particularly for young adults who told Amex in market research they want more donation options, said Lisa Yokoyama, vice president and head of product for Amex Digital Labs.
Over the last decade Amex customers have volunteered to collectively donate about $110 million worth of Amex loyalty points to charitable organizations and causes, she said.
"Millennials and Gen Z consumers are the fastest-growing cohort of our customers, and 61% of millennials specifically said they are interested in increasing their charitable giving," Yokoyama said.
One way Amex is setting its donations program apart is by automatically collecting consumers' individual transaction-based donations into $25 increments so users can see their impact more clearly. The initial pilot includes nearly 2 million charities.
Consumers can also choose which of seven merchandise categories — such as groceries, restaurants or transportation — will trigger a transaction round-up donation in a specific amount.
"Instead of rounding up transactions at the checkout to donate to random causes, we're personalizing the experience, giving people a chance to see their donations pile up and control where the money goes," said Keith Leaphart, Philanthropi's founder and CEO.
Purchases by adults between the ages of 25 and 40 have risen 50% over 2019, and the same group accounts for 75% of sign-ups for American Express’s pricier new cards.
Round-Up funds go directly into an account Philanthropi manages, and Amex customers can update their Round-Up categories or chosen donation amounts at any time, Yokoyama said. Once the rounded-up transaction goes through, it's final.
"Each Round-Up donation is treated as a separate transaction that shows up in the customer's app and on their statement so they can constantly see how they're helping and where their contributions are going," Yokoyama said.
Through Amex's partnership with Philanthropi, participating American Express customers also may sign up for a donor-advised fund, an option typically not readily available to small donors, Leaphart said.
Philanthropi's donor-advised funds, called Impact Accounts, enable users to donate dollars, various other assets and volunteer hours to charities, with a dashboard to track when, where and how much they have donated to whom, with tax implications.
Amex Round-Up joins other options consumers have for generating donations based on their spending.
Austin, Texas-based RoundUp App, which was founded in 2018 and merged with Flourish Change two years ago, allows consumers to make charitable donations at the checkout through participating merchants. Users may link any funding source and round up transactions, sending the difference to any of 1 million different organizations.
Mastercard in 2018 launched Mastercard Donations, an app that lets customers register their debit or credit card details to tack on a donation of at least $1 for charitable organizations orchestrated by Benevity, a Canadian startup that streamlines donation management.
