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Financial Service Industry, The New Charity Leaders?

Mary Thomforde

Mary Thomforde

How financial service institutions are helping to change philanthropic giving.


The financial service industry is known for several things, such as:

  • Banking services

  • Direct savings

  • Lending

  • Investments

  • Insurance

  • Redistribution of risk

 

But did you know that the financial service industry is one of the most philanthropic sectors in the business world? Philanthropy creates an ecosystem of social good. Community engagement and community empowerment while enabling individuals to make an impact by giving back are their core tenants.

One way the financial service industry is helping to make a charitable impact globally is through technology. Fintech is making it easier for people to engage with charities, regardless of income level. Fintech programs have created apps that empower users to donate small amounts of money aside over extended periods, often in the form of recurring donations. These apps frequently focus on micro-philanthropy, as well as serving as full-featured donation trackers.

Social fintech startups and charity fintech firms generally target their apps toward individuals who may not be a millionaire. Still, they believe in the impact of giving back, as well as younger adults and millennials, who are fast becoming the largest segment of giving. Many are accustomed to using fintech apps for banking and may need assistance to get involved in philanthropy. Through these fintech apps, users can also use roundup when making purchases on their debit and credit cards. Through roundup, they can dictate which specific charities receive their donation.

Another way fintech companies are using technology to pave new paths in philanthropy is by broadening the access individuals have to Donor Advised Funds. Also called DAFs, they are a tool to manage charitable giving that has been popular with the ultra-rich. With a donor-advised fund, individuals can donate to their fund and claim a tax deduction for the year the money is committed. They can also keep the money in the DAF growing tax-free and make donations to different charities over time.

When donors are ready to distribute the money to charity, they can select from among nonprofits registered with the Internal Revenue Service, and they can choose whether to share their personal information with the charities. Fintech apps like Philanthropi empowers individuals to create a DAF and create personal foundations that can help them to better shape their philanthropic legacies for generations. 

They can also contribute and track their time, skills, and resources to worthy causes like education, health, social justice, and others that contribute to a brighter future for all. Fintech companies are more than just an extension of your local bank branch. Fintech creates a bridge that helps nonprofits and givers find each other to make a more significant impact on the world. 

About Philanthropi

Founded in Philadelphia in 2018, Philanthropi is revolutionizing charitable giving and democratizing philanthropy through its giving platform. They are allowing everyday donors to seamlessly support their favorite nonprofit organizations.

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