The Network of Giving (N.O.G.) will harness the power of positive social impact to create deep emotional connections and loyalty between consumers, merchants, banks, payment networks, and charitable organizations. Merchants who are part of a banks N.O.G. program will add an element of philanthropic giving to each N.O.G. transactionchanneling funds to charitable organizations and motivating consumer cardholders to shop at N.O.G. merchants.
These consumers will save money through rewards offered by the participating merchants, win prizes simply by transacting or providing merchant feedback, and feel good about their transaction generating donations from the merchant and at no cost to the consumer. These donations will be directed from the N.O.G. to the charities of the consumers choice, selected from a list pre-approved by the bank. In addition, consumers using cards that offer points, miles, or other rewards will retain that benefit while also participating in the N.O.G.
Merchants will achieve profitable measured growth by acquiring new customers, retaining existing customers, and re-engaging customers who have had a negative experience. Merchants will be viewed as being socially responsible by donating a merchant-defined portion of the transaction amount to the N.O.G.
The bank, along with the payment networks it utilizes for its digital payment offerings, will offer the N.O.G. to its credit/debit card and mobile wallet customers and to merchants in the community. The bank will also identify the charitable and community organizations it will include in the N.O.G., which in turn will benefit from this new donation revenue stream with minimal administration. The bank and its service providers will collect the donation amounts from the merchants, and distribute them to the charitable organizations based on the ratios of distribution selected by the consumer cardholders. The bank will increase brand awareness and reputation, incent consumer behavior to displace cash and checks with digital payments, and provide an innovative technology solution to its customers.
The N.O.G. will initially deploy with one bank in the United States, targeting 500 merchants and 25,000 cardholders in the commitment period. The N.O.G. will be delivered with the following key principles: all donations are 100% pass-through as no fees are deducted from donations; all donations are 100% accountable and will be independently audited to ensure accuracy and appropriate distribution to effective NGOs and community organizations; merchants will able to specify donation percentages per transaction; cardholders will select the community organizations that receive these donations; and there is no cost to cardholders.
Trusted Innovators (TI) commits to providing the patented N.O.G. technology, and the experiences of six previous successful market deployments.
The N.O.G. will be delivered to a bank in the U.S. using a phased approach.
Phase 1 (Q1-Q3 2016)
The bank partner will be secured in Q3/Q4 2015, and will create the N.O.G. ecosystem between merchants, credit and debit cardholders, and charities in a controlled soft launch in a geographical area within a major market city of the bank. Phase 1 will be completed in a two to three month timeframe. The outcome of this initial soft launch will be 25 to 50 merchants and 2,500 to 5,000 cardholders.
The approach for this phase will utilize the N.O.G. Implementation Playbook, which includes tools and templates, and defines the major activities across two primary work streams: the N.O.G. Loyalty Marketplace Program Deployment (business stream) and the N.O.G. Technology Deployment (technology stream). The playbook for the business stream includes all the integrated branding, marketing and business development activities required to incent merchants, cardholders, and charitable organizations to join the program. The playbook for the technology stream includes technical integration requirements, internal change management approach (e.g. training, communication, organizational design), and operational support activities.
Phase 2 (Q4 2016-Q1 2017)
After validation and refinement of the N.O.G. arising from the initial soft launch, the bank will begin the Phase 2 expansion of the N.O.G. to other defined geographies in a strategically planned roll-out. Phase 2 will occur over the remainder of the commitment time period. The outcome of this roll-out will be to grow to 500 merchants and 25,000 credit and debit cardholders.
Phase 3 (Ongoing)
The N.O.G. will continue to grow across the entire market of the initial bank and to other financial institutions.
TI commits to provide CGI a progress update in February 2016, outlining the success achieved in Phase 1. In February, 2017 TI will provide an update on the market growth of the N.O.G., including a review of the total charitable amounts generated from the program.
According to the National Philanthropic Trust, charitable giving in the United States hit an all-time high in 2014, with almost 95% of households giving an average of almost $3,000 each. Corporate and foundation giving also increased in 2014. Given this increase in philanthropic activity, an opportunity exists to capitalize on Americans desires to positivity effect their communities by tying everyday purchases to charitable giving.
At the same time, the financial crisis of 2008 damaged consumers view of banks as a trusted partner. According to a joint study from global research firm GfK and bank personalization technology company Personetrics, only one quarter of U.S. consumers view their financial institutions as a trusted partner. Further, millennials are demonstrating their willingness to migrate to other options for their financial services, particularly technology-based solutions. With uncertainty in consumer loyalty, banks are seeking opportunities to increase the positive perception of their corporate social responsibility, and deliver solutions that utilize innovative technology. In addition, tech solutions can decrease the use of cash and checks as a form of payment, both of which have a tremendous associated infrastructural cost largely borne by financial institutions. Cash also introduces significant societal cost as it facilitates all of the illicit activities in the world.
Although cause marketing is often successful, it frequently results in consumers donating to a cause of the merchants choice, resulting in a donation made in the name of the merchant. A shift is possible by having the merchant contribute the donation amount and the cardholder choose where it goes. This could be achieved while driving profitable growth for the merchant through increased customer loyalty and sales, as they will be seen as socially responsible.
Finally, charitable organizations are looking for alternative sources of revenue for their cause. There is a potential to create solutions that grow the entire pool of charitable giving for all charities.
The Network of Giving provides a proven solution which seeks to address a number of these societal and organizational issues and trends.