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Give back by checking into the real-world places you go each day. It’s good Karma.
Just days after we posted our trend piece on geolocation, inspired by the “clear implications for entrepreneurship, sustainability, and green business,” we witness the launch of CauseWorld, a mobile geolocation iPhone/Android app that enables users to earn points (Karma) by checking into various locations and convert them into charitable donations and other social goods. It’s essentially SocialVibe meets Foursquare. Given that it’s backed by legendary VC Kleiner Perkins, this is one to take seriously.
The CauseWorld model follows a recent trend wherein consumers become an integral part of a company’s philanthropic or CSR efforts. The reasoning goes something like this: If we’re already giving to charity, why not get some extra credit and exposure by involving our customers and potential customers in the process? Web 2.0 technologies and mobile apps make this quite easy to execute and manage. CauseWorld’s novel approach leverages geolocation and commerce (geo-commerce) in forming a business model with clear social value.
For example, when you check into a restaurant or retail outlet using the CauseWorld app, you earn Karmas (points). When you accumulate enough of them, they can be donated to various causes. Instead of attaching overt monetary value, though, Karmas are converted into more tangible impacts such as offsetting two pounds of CO2, donating a book, or planting a tree. This is clever because the perceived value of these goods is much greater than the actual. It certainly feels better to plant a tree than to donate 10 cents (market price for tree planting) to American Forests.
You’ll earn an average of 10 Karmas per check-in, and it takes 100 Karmas to plant a tree. So you’re earning roughly a penny per check-in at that rate of conversion. This isn’t meant as a criticism because it’s a helluva lot more than you get from a Foursquare check-in. It’s only fair, though, that we put things into context.
These donations are currently funded by $500,000 in grants from CitiGroup and Kraft Foods. Each time you make a donation, there is a reminder about which company (sponsor) made it possible. This is a key component of the model because it facilitates a feel-good engagement with the sponsor’s brand. CauseWorld has essentially placed a value of one penny per point by making a total of 50,000,000 Karmas available. When you do the math, it’s quite a bargain for Citi and Kraft to be earning positive brand engagements at a rate of $0.01 to $0.10 a piece. Over time, CauseWorld can develop a competitive marketplace for these engagements, whereby sponsors bid for the spots. This can potentially raise the cost to purchase Karmas associated with certain causes, where CauseWorld could earn a margin on the exchange. At this point it’s not clear whether this is part of the revenue model.
Like Foursquare, you’ll also earn status symbols (badges) as you accumulate points and convert them. Naturally, there are limits to the number of times you can check in per day, and you can only check into a single location once per day. The app offers Facebook integration, so you can automatically post your CauseWorld actions into your news feed, and it has a well-designed e-mail invite feature. There is also a Community Achievements board that tracks where the Karmas are being donated, complete with the aggregate impacts.
TechCruch outlined the core business model on the commerce end:
For now businesses that get the extra foot traffic are paying nothing at all. Although I’m sure [parent company] Shopkick will be sending reports to those businesses letting them know how many people they brought into their stores. In the retail world, people mean conversions, usually 25% – 90%, depending on the type of store (nobody walks into 7-11 or a supermarket without buying something, but less people buy something at Best Buy).
I applaud the charitable aim of CauseWorld, but I also note a brilliant business plan – finding ways to get people to step foot inside a physical store. If I was Gap or Nordstroms I’d pay right now to distribute karmas to users of the app for coming into the store.
This is a geolocation game in the spirit of Max Gladwell, so we’ll be playing along and reporting on its progress.
8 responses so far ↓
1 elfi // Dec 28, 2009 at 1:57 pm
what about the actual footprint of that corporation? e.g. Kraft uses genetically modified ingredients without labeling – i look askance at their support of this initiative. that kind of information should be transparently divulged, at the very least.
2 EddieStarr // Dec 28, 2009 at 2:04 pm
Max, This was a great article! I am so getting the Cause World App right now
3 John Haydon // Dec 29, 2009 at 5:38 am
I hope they’re considering a partnership with @Foursquare
4 Mystique Shopper // Jan 13, 2010 at 3:08 pm
The app does make you feel like you are doing something good. Each donation has it’s own graphics. Our company is suggesting it to all employees. It has a polished feel.
This article raises some good points and I do wonder if it will become too commercial and lose it’s charitable likeness. I hope not.
5 ottnott // Jan 13, 2010 at 3:37 pm
I have the app. It will be deleted soon.
Each time you successfully use the app, all you “earn” is the right to choose which of the pre-selected charities will get 10 cents of already-donated money. The money is already donated, so your efforts don’t do anything to increase corporate giving.
I believe that the app is mostly a front to help Kleiner Perkins and Shopkick service test their technology and gather data for marketing the Shopkick service.
Each store “check-in” gets you 10 karmas, which, when donated, are worth 1 cent each. It takes additional effort to then “donate” the karmas. You can’t “check in” to another store for another 5 minutes.
As for the argument that success of the CauseWorld app would encourage corporations to give more, call me skeptical at best. Corps tend to budget their charity dollars first, and then decide how and where to distribute them.
If CauseWorld was really about giving, it wouldn’t waste so much user time for so little benefit to charitable causes.
6 Frank // Jan 17, 2010 at 8:31 pm
ottnott // Jan 13, 2010 at 3:37 pm
“I have the app. It will be deleted soon…Each time you successfully use the app, all you “earn” is the right to choose which of the pre-selected charities will get 10 cents of already-donated money. The money is already donated, so your efforts don’t do anything to increase corporate giving.”
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This was an initial concern of mine also. Still don’t know how I feel about this part. This is usually the catch though for the usual “when you make a purchase the company will make a donation to whoever”. If you hear or see the fine print the company usually states a certain cap to their donation and a certain date that the drive will end.
I always assumed that if not enough people got involved for the company to hit it’s cap then that company would only say donate $9,000 of the $10,000 they were offering.
Basically the companies saying here’s $10,000 to use in 30 days, if no one donates it then the company keeps whats not used.
Again, totally assuming this, but whatever. If you don’t like it don’t use it. If you do then do it.
7 Carter // Jan 28, 2010 at 12:53 pm
Hey Frank and Ottnott,
You guys bring up some good points, but I think there’s a key point that both of you are missing: CauseWorld is turning REGULAR marketing budgets (as opposed to traditional philanthropy budgets) into charity. For example, Kraft’s philanthropy foundations didn’t even seem to be involved in this – it’s the marketing and innovation guys in the firm that are pushing this forward in the press. Why? Because the brands get engagements with thousands of users with their brands. Instead of a nice press release for a $100K charity contribution, they get personal engagements and brand value for each ten karmas. How cool is that for a brand? It’s a win for the user and for charities and the brand. Instead spending money only on traditional marketing, they go through CauseWorld to get marketing AND give to charities. That alone can shift more dollars to be spent on nonprofits because nonprofits will get access to part of the marketing budget in addition to the current philanthropy budget.
And for users, we get to choose which organization gets the karmas. It’s not a chore for me to decide where the money goes- I’m happy I get to be involved. That is how it SHOULD be decided where the money goes. What do we get right now from traditional marketing? Nothing. Well, maybe you’ll get a jingle stuck in your head for a few days.
Also, CauseWorld added the Red Cross for helping with Haiti Relief days after the tragedy occurred. You can’t claim this was a “pre-selected” cause- and it looks like more are getting added soon.
It’s not a lot of work for me to click on the app when I’m waiting in line and collect the karmas. It’s certainly adds more value to the world than some of the other apps I have. And I seriously doubt either Kraft or Citibank would let shopkick keep any donations- you can’t write it off otherwise
Just my two cents.
8 Esperanza // Jul 18, 2010 at 9:00 am
Causeworld has a major flaw you can sit in your car and checkin with businesses up to a block away that’s not really getting customers into a store
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