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Special section Giving the gift of charity

Gift cards are giving buyers and recipients the chance to donate to worthy causes during the holiday season


Gift cards get in on the charitable act
 

Americans are perhaps the most charitable group of people on Earth. In 2006, U.S. charitable giving hit $295.02 billion, according to a report by Giving USA Foundation. (OK, that total included the $1.9 billion Warren Buffett gave as part of his 20-year commitment to various charities.)

Many credit cards now have the option of donating reward points to a charity of choice. And with the gift card growing to be a most popular gift to give, it figures that charitable giving and gift cards would meet and marry.

Two types of cards have emerged: One operates like a regular gift card that enables the recipient to buy a gift as well as donate to charity; the other is a prepaid card purchased by a donor and given as a gift to a recipient, who can then use that card to donate to the charity of his or her choice.

The GiveCard, from Givingtreelife.com, is a MasterCard-branded gift card. Here's how it works: You buy a $50 gift card, and give it to your grandson. He donates 10 percent of the card money to a charity and spends the rest on a gift for himself.

"When people give a gift, they want it to have some meaning. Last Christmas I was shopping for presents and I would typically buy store-based gift cards, like for my mother," says GiveCard founder and president Nick Nicholas. "I wondered whether there was a more flexible card I could buy her, something that would have more meaning. Having worked with nonprofits before, I understood what their needs were. I didn't think there was any card that had social value. The concept came from understanding the needs of nonprofits and we put it with this new prepaid concept."

GiveCard, based in Nashville, uses the Guidestar database of nonprofits, which is a universe of 1.5 million charities, so recipients have plenty of choice.

Learning to share
"Our fundamental business model is about sharing," says Nicholas. "What we teach our kids at a young age is to share. When you give the GiveCard, you're giving them a gift but teaching them how to help out society, too."

The GiveCard can be used to get cash from an ATM, but that will cost $1.50 per withdrawal, and checking the balance at an ATM will add another $0.50. Cardholders can check their balances for free online or by calling the toll-free number for Givingtreelife.com.

A similar gift card is available from Giveline.com, an online store that donates between 7 percent and 33 percent of the cost of the merchandise to a charity of the customer's choice. The average donation is 16 percent. Giveline.com has been in business since 2005.

The Giveline.com gift card can be loaded with amounts from $5 to $500 and can be purchased online. A plastic card can be sent to the recipient via the U.S. mail or an e-card can be e-mailed. The recipient can choose products in categories such as entertainment, electronics, home and travel. Cardholders can select an organization to donate to from more than 10,000 nonprofits.

-- Posted: Dec. 3, 2007
 
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 RESOURCES
2007 Gift Card Study
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How to check out your charity
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