Introducing PhilanthropMe. Better Saving for a Better World.
The purpose of our service is to provide a creative and appealing way
for millennials to save money, while simultaneously incentivizing
charitable donations. Our idea hinges on the fact that millennials view
philanthropy differently than do other generations. Millennials want to
feel engaged and purposeful when it comes to giving to charity. Meg
Fowler Tripp, director of editorial strategy at Boston branding firm
Sametz Blackstone Associates, says that “Millennials like to think of
themselves as not just donors, but investors” (1). Using our service,
millennials will feel like they are investors not only in the charities
they pick, but in their own futures.
Our idea capitalizes on research that shows that millennials are more likely and more open to giving to charity in ways that previous generations have not been, particularly through mobile apps and the internet (2). Given the extent to which personal banking has become largely mobile–especially for millennials–we believe that an integrated donation and banking platform will be well received by our target audience.
Contrary to popular opinion, millennials have been shown to be better at saving than previous generations. As a result of sky-high tuition costs, higher costs of living, and low job security, millennials know that being prepared for the future is more important than ever (3).
Millennials are already used to using apps like Mint to track their spending and save money, and we think that directly integrating automatic savings into existing banking apps will appeal to this demographic in a big way.
When considering Fogg’s behavior model, we realized that most users would have some of the ability and motivation to save, at least at certain times, but would rarely have the trigger necessary to do so. We focus on all three areas. As for ability, we are seamlessly integrated into a user’s bank portal/app. We increase motivation by also tying the savings to charitable donations from the bank. Regarding triggers, we provide them in a couple of ways. We monitor the news, and when major events happen that might increase donations to a charity (think an election result or court ruling leading to increase in civil rights/political nonprofits; a tsunami or natural disaster increasing donations to global charity organizations; a climate study or conference increasing donations to green charities) we prompt the user on the app (and on their phone, if they enable notifications) to make an additional donation/savings payment. Moreover, whenever someone with a similar profile makes a major purchase (such as buying a house) or donation, we alert the user with a message like “John just bought a house after saving $x for x months!”, to create positive peer pressure for saving .
A number of parts of this system work in place unseen to the user.
The first is the means by which we calculate “saving.” To operationalize our definition of “desirable saving” we first look at: where you went to college, your level of education/career path, your credit card history/payments, your location, your health insurance premiums, and the behavior of your peers.
We have some logic behind each of these pieces of information: where you went to college can give hints to your future salary/career prospects (based on data we’d have about where others went to college, and also data in general on median earnings in career fields for graduates from specific colleges) (it matters for specific majors/colleges more (4) and many have tried to aggregate this data already (5); your level of education and career path has both an impact on your immediate finances as well as your long term finances (for example, you might go to medical school, which will cost you lots of money in the short term, but may dramatically increase your earnings in the long term)(6); your credit history and payments can illustrate any credit card debt or give an estimate on your level of responsibility; your location gives us a general cost of living estimate for monthly expenses (7); your health insurance premiums and payments illustrate whether or not you might have a chronic health condition (if the premiums or payments are much higher than average) (8), which would require greater savings; and the behavior of your peers (who have similar careers/educations/backgrounds) gives us data on how much you might try to spend otherwise, when you might need to save for a house down payment, when you might plan to have children, and other major financial milestones (to gather trends like these (9) from your peers).
To gather this data, we would be as invisible as possible (but legal – you’d probably sign an updated terms of service agreement with your bank). We could likely figure out your career path/job and educational institution based on paychecks coming in and the location of your textbook purchases/food purchases when in college. If you’d just opened an account with the bank, or we were unable to determine this, we would show a brief popover survey when you opened this PhilanthropMe account. We would have access to your education based on where most of your purchases were as well as the address you have on file. Your credit card and health insurance payments would likely be monthly transfers/withdrawals out of the account. The behavior of peers could simply be gathered the same way to collect a larger “similar to you” dataset for predictions, similar to how Spotify recommends new songs by looking at similar users’ likes.
Once we have all this information, we recommend you save/donate a percentage of your income between 10 and 20%, depending on calculations we do with your data similar to those found at NerdWallet (10).
As for the bank “matching” your donations, all banks have philanthropic or charitable branches via which they are already donating to or funding nonprofit projects (11). So, when you donate, you’d actually be selecting from charities the bank already gives money to. You’d see/feel as if you were donating to the charity, whereas in reality the bank is just “allocating” some of its donation to the charity in the amount you give, and your money actually goes into your savings account. In other words, we’re simply redesigning the user’s experience, whereas the end effect–your money in your savings account; the bank’s money to the charity–is the same. Though it may not be sustainable at 100% user saturation–banks donate a lot of money, but not a full 1-to-1 ratio of the percentage of the earnings of every customer–if our product ever reached that level of use, it could become a ratio: for every dollar you save, x% is donated to charity.
11) https://www.jpmorganchase.com/corporate/Corporate-Responsibility/corporate-responsibility.htm, http://about.bankofamerica.com/en-us/global-impact/find-grants-sponsorships.html, https://www.tdbank.com/community/corporate_giving.html