How an Austin entrepreneur launched credit card that gives to charity

Anyone plugged in to social good knows it’s important to support the causes you care about in a variety of ways – donating, volunteering, advocating and even sharing their posts helps keep your favorite nonprofits going.

Now a new credit card offers you a way to donate every time you use it. Charity Charge takes the rewards-card model and points it at philanthropy by sending one percent of your purchases to the nonprofit of your choice.

And why not? More than 50 percent of credit cards offer some kind of reward like cash back, airline miles or points you can redeem for merchandise. But for Charity Charge founder, Stephen Garten, there’s nothing rewarding about the cards at all.

“I had signed up for a credit card that earned reward points and cash back,” says Garten, “so I logged into the bank’s rewards catalog and saw the things I could redeem the points for like gift cards and toaster ovens.

“But I just didn’t need more stuff,” he says. “The card made all these promises that it would change my life.” Turns out, Garten says, a toaster oven would not change his life.

In fact, when Garten looked into it, he found out that even those cards you can redeem for miles have so many restrictions and blackout dates, many consumers don’t use them. In 2010, consumers left about $16 billion of these rewards dollars – about one-third that were earned – on the table.

Stephen_CEO_Charity Charge_headshot_smallGarten says it was an email from Austin nonprofit, Hill Country Conservancy, that helped him put the two concepts together. “That’s when it clicked,” he says. “What if I could give my points to charity?”

But it didn’t happen overnight. While being supported by savings, part-time work and his parents, Garten became an expert in bank cards, payment processing, rewards cards and more. He did a search for credit card consultants in LinkedIn and called them, one by one, until the 18th person responded. He met with several banks until one finally took his meeting. He went on about 80 pitch meetings.

Garten says he turned to mentors and supporters like Mitch Jacobson, Isaac Barchus, Robert Reeves and Bart Bohn of the Austin Technology Incubator of UT-Austin. He also credits Thon Morse, the founder of Kimbia, for this understanding of the complicated payment-processing world.

The card launched last week and Garten says it’s all ready a success just for existing. 

“The truth is it’s a risk-averse industry. I’m sure lots of people had the idea but could not put in the work. I was heads down on this for two-and-a-half years, and it took my becoming an expert of the credit card side, social media marketing, working with advisers… putting all these pieces together to make it easy for people to give.”

Garten says he truly believe that people want to make the world a better place. “My goal was to create an easy way to give every day and to give the cardholder choice. Why not let them choose what charity they want to support and how they want to support it?”

Learn more at Charity Charge

“Credit Cards” by: Sean MacEntee is licensed under CC BY 2.0

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