Smart Banking Helped Me Do Well. Can Smart Banks Help Me Do Good?

Try to think of an exemplary American philanthropist, and Warren Buffet, Oprah Winfrey, and other superrich individuals may leap to mind. While charitable donations come from people of all backgrounds, philanthropy is a term associated with the very wealthy (and drinking, if you went to a Greek school).

Perhaps this is the reason many banks’ philanthropic services are designed for very wealthy clients. But thanks to recent examples of the power of small donations and the large American appetite for charity opportunities—$32 million was raised for Haitian earthquake relief by $10 text message donations—some financial institutions, such as American Express, are beginning to explore the market potential of philanthropic services for a wider clientele.

Tapping into this market requires a new kind of service. If you’re a scion or a celebrity, your financial advisor might help you use some of your millions to set up a foundation, or connect you with an existing organization seeking a large gift for a particular project. But this doesn’t do you much good if you don’t have at least several thousand dollars lying around. In the new wave of philanthropy described by Katherine Fulton at TED2007, there are plenty of people interested in giving who don’t have that. Serving them requires a different approach.

The American Express Members Project is essentially providing the same service that some banks provide to elite clients—helping them find and support causes—but in a way that can reach many more people much more efficiently. It also provides something very wealthy donors don’t need: the power of leverage. Card members can vote on a charity for AmEx to support or find a cause to donate to themselves. The first option provides an opportunity to be part of a much larger donation; the second to make an individual donation to a more personalized cause. One-on-one philanthropic counseling may not be worthwhile or feasible for smaller donors, but it is no longer the only kind of service that helps people give.

This is miles beyond donating a percentage of your credit card purchases to a charity of your choice. The Members Project uses the Internet to break down the wall between customer and provider. Moreover, the Members Project doesn’t just serve customers, it collaborates with them, providing funds to fuel their ideas—in contrast to the more traditional elite philanthropic services, its very nature requires a large group of participants. The idea of smaller donors pooling resources for greater impact is a growing trend in online philanthropy. But offering it as part of a suite of financial services, as AmEx is doing, is new. Could the Members Project be the beginning of a wave of new philanthropic services from banks?

Does your bank help you do good? Does your credit card company? What kind of philanthropic services would you like to see from them?