Rewarding charities with point donations
March 22, 2004
By Louise Chatterton Luchuk
At the end of 2002, an estimated 76.2 million credit cards were in
circulation in Canada. That's 3.1 cards for every Canadian over the
age of 18. The majority of these (49.4 million) were Visa or MasterCard
credit cards, while 26.8 million were cards from large department stores,
gasoline companies, and other issuers. Many cardholders receive reward
points for their purchases that can be redeemed for free merchandise,
services, and/or travel. Added to the mix are various loyalty cards
issued by stores and gasoline companies; these cards do not offer credit
of any kind but allow cardholders to accumulate points as a reward for
shopping at a particular store. Every time Canadians shop, order online,
buy gasoline and more, they accumulate reward points…points that can
often be donated to charity.
The easy way to give back
Currently, about 8.5 million Canadians carry an Hbc Rewards card in their
wallet (valid at the Bay, Zellers, Home Outfitters). The option of donating
reward points began about 10 years ago - making the Hudson Bay
Company one of the first companies
to offer any type of points donation program. Diane Gordon, director
of community investment for HBC says that, "back in our Club Z days, we came up with
the idea. We were looking for a way to raise money and help support the
Canadian Red Cross because of a disaster that was in the news." The next
step involved figuring out the logistics of programming their computer
systems to allow cardholders to donate points.
Hbc reward point donations support three main charities. Cardholders can
make a donation in any amount to:
- the Zellers Family Fund, which supports organizations committed
to family causes in the area of health, wellness, and education;
- the Bay's Well into the Future program, which helps fund vital cancer
support and research programs and assists cancer patients and their
families, and;
- the Canadian Red Cross.
Cardholders annually donate approximately $50,000 for each initiative. Also, when
there are disasters like the BC forest fires last summer, cashiers in
the British Columbia and Alberta Hbc group of stores asked customers at
the check-out if they wanted to donate points. Signs in stores also promoted
the special points donation promotion. In one month, customers donated
$109,000. Mostly, publicity for the points donation program happens through
a full-page ad in the rewards catalogue.
Gordon encourages interested nonprofit organizations to review the Hbc
funding mandates and the application form that will be available on the
revamped website (www.hbc.ca) as of the
first week of April.
Helping nonprofits at the pump
Use a Royal Bank Esso Visa card, a separate Esso
Extra reward points card, or Speedpass and customers accumulate points
with every fill-up. Since January 2003, these rewards points can be donated
to Hockey Canada, the Hockey Jersey Program or the Kidney Foundation of
Canada.
Kim Fox, company spokesperson, explains the reasons these charities
were chosen. "Since the 1930s, Esso has been involved in all levels of
amateur and professional hockey. Providing an option for customers to
also support hockey programs in Canada fits in with our own corporate
giving program. Our Esso retail network across Canada is a strong supporter
of the Kidney Foundation and participates in fundraising initiatives for
the organization every year. It makes sense that we offer this option
to our Esso Extra members as well." So, in addition to the $6 million
dollars Esso donates to 400 Canadian charities, the company is now making
it possible for its customers to support three specific charitable causes.
The publicity payoff
Approximately 800 Esso Extra cardholders donated 1,568,834 points (for a total
of just under $8,000) to The Kidney Foundation
of Canada in the inaugural year of the points donation program. While
the total represents only a small portion of the overall funds that the
Kidney Foundation of Canada must raise, Marlene Shoucair, director
of national communications, points out that the return is in line with
the amount of time required to make the program work. "We submitted our
communication materials to Esso and then they run the program, so there
is no major deployment of our volunteers or staff. I'm in touch with the
people at Esso every few months but there is no resource drain on the
foundation." Plus, the publicity is outstanding. The foundation is mentioned
in the millions of Esso Extra brochures that are distributed, on the Esso
web site, and in an e-mail sent specifically to Esso Extra customers.
It took about four months to put the mechanism in place to allow cardholders
to donate points (either online or by contacting the customer service
centre), to develop the communication material, and to fine-tune the points
reconciliation process. Esso and The Kidney Foundation of Canada recently
extended their partnership for another year and agreed to a full evaluation
at the end of this year.
Supporting an in-house charitable endeavour
An even newer points donation program is getting underway through the President's
Choice points program and the President's Choice Financial MasterCard.
In this case, points can be donated to a charity established by, and connected
directly to, the Loblaw group of companies, PC
Children's Charity. Instead of donating money or points to a third
party, the funds go directly to help families with children who are physically
or developmentally challenged. Funds provide assistance such as lifts
in bathrooms, wheelchair access to homes, and ramps for vans.
The charity was set up about three years ago and special events like golf
tournaments and a bowl-a-rama with industry suppliers raised money for
children and families with special needs. The company's points redemption
option began in August 2003. "It was a clear opportunity to raise the
profile of our charity and another avenue to raise more funds," explains
Geoff Wilson, vice president of industry and investor relations
for Loblaw Companies Ltd. The points donation program is still in its
infancy, and with more in-store events Wilson anticipates that the profile
of the charity and the points donation program will increase.
Collectively, Canadians have millions of credit cards plus the many, many
reward cards we sign up for and carry around in our wallets. Beyond the
Hbc Rewards, Esso Extra, and PC Points donation programs, other points
donation programs exist. What is the financial potential for Canadian
charities if more people start to donate their points? As Hbc's Diane
Gordon points out, "when you have 8.5 million customers that help in a
small way, it adds up powerfully."
Louise Chatterton Luchuk is a freelance writer and consultant who
combines her love of writing with experience at the local, provincial
and national levels of volunteer-involving organizations. For more information,
visit www.luchuk.com.
