The Truth About Charitable Gift Cards
In my post on green holiday gift giving last month, I mentioned donations to nonprofits. Giving directly to an organization that you know your giftee supports can be a great idea, but if you’re not sure in what way your recipient is philanthropically-inclined, charitable gift cards are a good alternative. The way they work is that you buy a gift card in the amount of your choice, and your giftee then visits the web site to enter the gift card number and choose which charity will get the money.
But with several different gift card organizations to choose from, how do you decide which one to support?
If I buy a $20 gift card for my co-worker for Christmas, will her selected charity receive that entire amount? It depends on the policies of the gift card service I use. Most will deduct processing fees before sending the money to the charity. Some services charge a fee to the purchaser on top of the card value, and others don’t. What happens to the money if the card is never redeemed? And does the card expire? What charities can my recipient choose from in the first place? And what about the environmental impact of the cards themselves?
I compared the policies of five major charitable gift card organizations to figure out which ones were actually giving the most money to the intended recipient and whose policies seemed the most eco-friendly. All of them are registered 501c3 organizations, which means that the gift card purchase is tax deductible to the giver. (The recipient does not receive a tax deduction for redeeming the card.) Here’s what I learned:
TisBest Philanthropy: TisBest offers a list of 250 major nonprofit organizations to choose from, as well as a list of local charities from 8 different U.S. cities. TisBest limits the number of charities so that they can vet the organizations, including reviewing their 990 tax forms. Gift cards are offered in any denomination from $10 to $5,000.
TisBest offers three delivery options: email, print-at-home, and physical cards made from 100% recycled plastic from Earthworks Systems. What’s more, TisBest is the only organization I found actually encouraging its gift card recipients to send back the spent cards for recycling. All plastic gift cards (whether from TisBest or any other organization or store) can be returned to Earthworks c/o Halprin Ind., 25840 Miles Rd., Bedford, Oh 44146. And TisBest is the only service offering a fully customizable option. For no extra charge, you can choose one of their designs or upload your own image to be printed on the card.
Of course, the greenest option is to send an electronic card and skip the plastic and paper altogether. All of the gift card services offer electronic options. And like some of the others, TisBest’s e-cards can be scheduled to be sent on a future date that you select.
So what about fees — to you and to the charity? TisBest plastic cards cost $1.49 for materials and handling. Regular shipping is free. There is no charge for email or printing at home. How much does the charity get? The face value of the card less a $1.95 transaction fee and 3% credit card processing fee. So for a $20 gift card, you would spend $21.49 for a plastic card or $20.00 for an e-card, and the charity would receive $17.45 (87% of the face value). Of course, that percentage gets better with higher donations. From a $100 donation, the charity would receive $95.05. (95%)
There is no expiration date on TisBest’s cards, but any money that is not spent goes towards supporting TisBest’s advocacy work promoting a non-consumerist message and creating programs to help its charity partners raise funds.
Charity Choice: Charity Choice allows gift card recipients to donate to a little over 100 different causes, major organizations like the American Cancer Society, SPCA, American Red Cross, etc. Cards are offered in a limited number of specific denominations from $5 to $1,000.
Charity Choice offers four options: email, print-at-home, plastic card, and “biodegradable” corn plastic card. Honestly, I’m skeptical of the new corn plastics, as I wrote in my article about compostable chip bags and yogurt cups, because of the environmental impacts of growing corn. But like I said before, the question of corn vs. petroleum-based plastic is moot if you choose the email gift card option.
Charity Choice does not charge a fee to the purchaser for the cards, but it does charge $4.95 for first class shipping of physical cards. The charity receives the face value of the card less $.50/card + a 3% credit card processing fee + a 5% administrative fee. So for a $20 gift card, you would pay $24.95 for a plastic card or $20 for an e-card, and the charity would get $17.90 (89.5% of the face value), which is more than from the TisBest donation. But consider what happens with bigger donations: from a $100 gift card, the charity only gets $91.50. (91.5% vs. TisBest’s 95%)
There is no expiration date on Charity Choice gift cards. Any money not spent from cards and administrative fees go to fund the Special Kids Fund, an umbrella organization supporting developmentally disabled and at-risk youth.
JustGive: JustGive allows gift card recipients to choose to donate funds to any registered U.S. charity and provides a full database of over 1.5 million of them. But you can also choose from the JustGive Guide, a list of 1,000 selected charities in 10 categories that have met JustGive’s criteria for inclusion. Cards can be created in any whole dollar denomination from $10 and above.
JustGive offers 3 card options: email, print-at-home, and a physical card made entirely from recycled paper. No plastic! E-cards are sent immediately after purchase. Unfortunately, there is no option to schedule them for a future delivery date.
Online gift cards cost $5 for the first card and $2 for each additional card. Mailed cards are all $5 each. The charity receives the face value of the card less a 3% credit card processing fee. So for a $20 gift card, you would spend $25, and the charity would receive $19.40 (97% of the face value) and the same percentage from any other denomination.
The cards do not expire. As far as I can tell, any unspent money is used to fund the work of JustGive in creating tools to promote charitable giving.
Network for Good: Network for Good also allows gift card recipients to choose to donate funds to any of the 1.5 million registered U.S. charities. According to Kate Olsen at Network for Good, their mission is about “choice in charitable giving.” Cards are offered in any whole dollar amounts between $10 and $250.
Network for Good offers 3 delivery options: email, print-at-home, and a flexible plastic card attached to a paper mailer. I don’t believe these cards are recyclable. Like JustGive’s cards, e-cards are emailed at the time of purchase or can be scheduled for the future.
The big difference between Network for Good and the other gift card organizations is that 100% of the face value of the card is sent to the charity. Purchasers pay $5 per card, which includes free shipping. So, for a $20 gift card, you would spend $25, and the charity would receive the full $20. For a $100 gift card, you would spend $105, and the charity would receive $100.
The other big difference is that Network for Good’s cards expire after 6 months. After that time, funds revert back to the organization to support its work helping train charities in outreach and online fundraising.
Global Giving: Global Giving offers gift cards to support specific charity projects throughout the world. On the site, you can read about the projects, many of which are not funded in traditional ways, and learn how various donation amounts could be used. Cards are offered in whole dollar amounts from $10 to $10,000.
Global Giving offers 3 delivery options: email, print-at-home, and corn-based plastic card. The purchaser can schedule cards to be emailed on a future date.
Charity projects receive the face value of the card less a 15% fee which supports Global Giving’s work vetting charity projects and providing the platform for them to get their message out to the wider world. Purchasers also have the option of paying the 15% so that the entire face value of the card goes to the charity. So for a $20 gift card, you would pay $20 and the charity would receive $17. Or you would pay $23 and the charity would receive $20. Either way, you are supporting the work of a unique organization helping to support projects that might have no other way of getting funding.
The cards expire in one year and any unspent funds go to support the work of Global Giving.
Some things to consider:
1) As long as they are made thoughtfully, charitable donations can be great green gifts that show your appreciation to the giftee and help make the world a better place.
2) When you know what organization your giftee would support, give a direct donation to ensure the highest percentage of your funds go to the actual charity. But charitable gift cards are a good alternative when you want your gift recipient to have a choice.
3) E-mail is the most eco-friendly option, requiring no paper, plastic, or shipping. If you choose to print your gift card, use recycled paper. Of the physical gift card options, I would choose the recycled paper cards from JustGive over plastic or corn, and I would choose TisBest’s recycled plastic card as my second choice since the card is not only made from recycled plastic but can be recycled again.
4) Giving gifts is supposed to be fun. In my real life, I’m an accountant, so analyzing gift card options and creating the above list was beyond thrilling. (I’m only slightly exaggerating.) If looking at all those choices and numbers gives you a headache, don’t worry. All five organizations are worthy.
5) A benefit of these sites is that they can expose your gift recipient to nonprofits and causes they might not otherwise have known about. But if you'd rather avoid gift card processing fees, another alternative is to ask your recipient for a list of their favorite charities and send a donation directly to the one you like best. That way, you're both happy.