Sunday, March 29, 2009

Giving anonymously, for a fee

How to give money to a friend anonymously (and be sure that it is received)? Try Giving Anonymously, established "to facilitate giving in such a way that "money" does not hinder friendship." They will send along your gift via their own check, and send you a copy of the cancelled check.

Anonymity when giving charity has a long history. It plays a big role in Jewish thought, for example, as codified by the 12th century scholar Rabbi Moshe ben Maimon (aka Maimonides, or the Rambam).

When looking at repugnant transactions, often the addition of money is what arouses repugnance (e.g. kidney donations don't arouse the repugnance of kidney sales). Something like that seems to be at work here; you might like to give someone a gift, they might need and want one, but the complications of giving and receiving money from a friend might prevent an otherwise mutually desired transaction from going through.

What is the price of anonymity? Doing it through this particular anonymizing service costs $2.50 + 2.5% of your gift.

Update (and sign of the hard times): Today's Boston Globe has a story on a related theme: Colleagues pitch in to ease the pain.
"As the economic downturn persists, specialists who follow workplace trends say more employees are trying to save colleagues' jobs through voluntary pay cuts or freezes, furloughs, and donations. "

5 comments:

Anonymous said...

2.5% is outrageous, particularly since the giver presumably is trying to do a good deed. Is there anything more reprehensible than scalping a good samaritan? (Sorry for the mixed metaphors.)

Also, it's not clear why a percentage based fee is even appropriate. Does it cost 10 times more to write a check for $1,000 than it does to write one for $100? If this is to work, they need a reasonable, flat fee, say $20 per transaction.

This is a good idea, but a disturbingly greedy implementation.

William A. Ryan said...

Anonymous,

According to their website they are a non-profit, and in their FAQ (http://givinganon.org/faq.php) they explain the pricing:

"The 2.5% fee is to cover banking and transaction charges which range between 2.4% - 3.1% for each gift transaction. The $2.25 helps pay for a postage stamp, the check, envelope and brochure. What's left of the $2.25 (roughly $0.05) goes towards our overhead of +/- $110 per month."

Anonymous said...

Thanks William. I should have looked more closely before commenting. My bad.

Gareth McCaughan said...

What are these "banking and transaction charges" and why are they so large? For individuals, neither writing nor cashing checks costs anything; is the situation different for organizations (even non-profits), or what?

Anonymous said...

Gareth & Anonymous,

The donations are made initially to the non-profit by the donor's credit card, and the fees, as for any other credit card purchase, scale with the amount. GA is simply passing along their cost.

An alternative would be for GA to accept checks from donors. However, this could lead to increased overhead (they currently claim a reasonable ~$110 a month in costs) and possible problems with check fraud.

Hope this helps clear things up.

--Andrew