As the online economy thrives, the frequency and average donation size of charitable giving in Canada has declined, according to the Fraser Institute.
Stepping in with an innovative solution, Ottawa resident John Farah launched GiveShop on June 1; an online marketplace allowing users to donate gently used items while simultaneously raising funds for charities.
A practicing lawyer for over 20 years, Farah says he came up with the GiveShop concept after realizing how difficult it was for charities to issue tax receipts in exchange for donated goods, coupled with the fact that many people are reluctant to sell their used items via traditional online marketplaces.
“They’re hanging onto valuable items that they aren’t using because a worthwhile alternative didn’t exist,” he explains. “I thought it would be better if, instead of just simply donating those [items] to charities, we [actually] saw them being used by other people. Having [this] online marketplace was a practical way to create a [space] that not just one charity, but all charities, could use while reaching a critical mass.”
After downloading the app, which is available on the App Store and Google Play, users have the ability to post a photo and description of the item they’re looking to donate, set a price, and select from a growing number of listed charities as to which they’d like to see benefit. Once the donor and buyer come to an agreement, the buyer can pay for the item using a credit card or visa debit, and the money will go directly to the charity. Along with the funds, the charity receives the donor’s information so that they can properly issue a tax receipt for the price of the item.
“We’re hoping this will motivate people for a few different reasons: they’ll know that the money their item elicits will go to the charity of their choosing, they’ll feel good knowing that their item is being repurposed, and they’re also getting a tax receipt,” says Farah of the platform’s incentives.
As a third party fundraiser, Farah says that although it’s free for charities to appear on the GiveShop app, the company collects a 15% platform fee that is deducted from the sale proceeds. But Farah insists that, prior to GiveShop, there really was no practical way for a charity to accept a gift that someone wanted to donate, because they simply aren’t set up for that process.
“By the time they appraise [an item], issue you a receipt, store it, and then try to sell it, they would have spent 60 per cent of the value of the item, if not more. [That’s why] a lot of charities have a policy to not accept in-kind gifts. So now they can at least refer that person to GiveShop. Hopefully the item will sell and the charity will receive that donation,” explains Farah.
Currently serving the Ottawa area, GiveShop plans to expand to the GTA in the fall, and eventually Canada-wide, with hopes that by simplifying donations through a less cumbersome transaction, they can help reverse the decline of charitable giving. With items like bicycles and microwaves, home furnishings and computers, GiveShop has facilitated the sale of 49 items at a total value of around $3,400 within the first month of its launch.
Farah sees GiveShop as a positive transaction for the three main parties involved saying, “Knowing there was a real positive social impact made it a lot easier to take the risks and spend the time to start this business.”
For more information on GiveShop, go to their website.