A New App Helps You Buy Less—and Give Generously

Yeah, yeah, there’s an app for everything. But rarely does an app encourage you to buy less.

“We want to encourage people to live within or below their means,” explains Micah Davis. He’s a software designer at OvenBits studio in Dallas. They work with lots of nonprofits and, he explains, “we get more requests to help than we can handle…so we said, 'let’s create a whole platform that can be used to help nonprofits.'”

Instead is that platform, now in beta testing. Davis hopes it helps to change your behavior for the better, and in the process, build a healthy microphilanthropy habit.

“Instead of eating at the Cheesecake Factory, how about eating at Chipotle and giving the difference?” Davis suggests. “Or, instead of going to the movies, use Redbox, and give the difference.”

His app facilitates your habit shift and drives dollars to charity in the process. When you download it, you enter your credit card info or sign in through Facebook to choose from a list of 100 or so charities. The default donation is $5, but you can pick more or less. The idea is to make one-button giving fun and easy, so when your coworker pops by your desk to say “time for a Starbucks break?" you can pass, then punch in a $5 donation to the Acumen Fund or the Cross Timbers Community Church of Argyle, TX.

Nonprofits have long been asking people to forgo a cup of coffee or a newspaper subscription and donate the difference—think NPR pledge drives—and now technology allows for a facilitator right as you stare the desert menu in the face or consider the impulse to order another Manhattan.

Microdonations through phones are shaking up the fundraising world. But so far, they're mostly for disasters. After the earthquake in Haiti, the Red Cross and other groups received $43 million in text message donations, mostly in increments of $5 or $10 dollars. Of those donors, 80 percent didn’t give in any other way. We don’t have the data yet to know if they would have given at all or way more online or over the phone, or if a cell phone and easy donating options created a whole new source of philanthropy, but we do know that Millennials respond better to requests to donate over the phone than older, typically more generous age groups.

Several experiments in building habitual donations have sprung up: The Mutual, still in startup mode, rewards small a monthly donation with discounts to shops and restaurants. The One Percent Foundation—which recently won a GOOD Maker challenge—is a giving circle designed for younger donors that asks you to pledge to donate 1 percent of your income. Philanthroper uses a daily deal model, but instead of sales it gives you an opportunity to donate $1 to a charity each day that you might not have heard about.

“Twenty percent of people who give just once on Philanthroper will give 10 or more times,” founder Mark Wilson says. “So this idea of making giving a habit actually plays out in practice.”

Among its 1,200 beta testers, Instead’s most popular use has been giving up or scaling back on meals and coffee. The average donation is $5 a month so far. By the time the app comes out of beta testing June 1, there will be added features to encourage donation.

“People want to set up these social challenges and goals with a little social gamification involved,” Davis says. For example: Could you, or your group of friends, brown bag lunch once a week all July and give the savings to charity?

Instead is a nonprofit, with an all-volunteer, part-time staff including Davis and other designers from OvenBits. They take a 5 percent fee of each donation after the credit card or bank processing fee—the same as Kickstarter and similar sites. Instead maps out where the 5 percent goes right on the website in proper new nonprofit transparency style. Naturally, the site and the app also tracks how much aggregate good you and other users are doing.

“Albeit they are small, one-off [actions],” Davis says, but “they could really add up to some big collective good.”

Photo courtesy of Instead.