Turning A 16 Billion Dollar Problem Into Doing Good


You want to change the world. You want to build a company that does good. You want to take something that is broken and fix it. That is exactly what Stephen Garten did by creating Charity Charge. This is his story how behavioral economics helped him fulfill his vision.

Every year, on average, an American household donates $1,296[1] to five charities. This does not include schools or religious organizations. Also on average, Americans carry 3.6 credit cards[2] and accumulate approximately $56 billion in loyalty and credit card points alone.[3]

What do these two facts have in common? Nothing. That is until Garten realized they were related and could be used to change the world.

Although an average American household donates $1,296 annually, it also wastes $205 per year in unredeemed credit card points. The value of those points has increased since 2011, and $16 billion dollars in free flights, hotel nights, gas or simply cash back go unredeemed.3

“What if we could transform those $16 billion in unredeemed points into positive, real-world change?” What if there was a credit card that would turn those precious, hard-earned rewards into useful points?

The key here is useful. But how do you create a useful credit card? A credit card that people would choose over a bank? A credit card unlike any other charity-giving card?

With those questions and the social good in mind, Garten consulted experts in credit cards, branding and the Behavioral Science Lab.

Garten wanted these questions answered to be reassured that his vision for a better credit card wouldn’t be dismissed as just a quixotic idea.

Since human beings are notoriously bad explainers of their own behavior, the Behavioral Science Lab has developed tools like MINDGUIDE® and BrandEmbrace® to help clients understand their audience — their biases, expectations and decision models.

The decision to choose a credit card or give to a charity is not made in a vacuum. They don’t just happen online or offline. Each brand, product or service is surrounded by a set of elements that play a vital role in one’s decision to adopt that card or give to that charity.

This understanding is behavioral economics. The interaction of multiple elements — economic and psychological — directs consumers to decide whether a product is fulfilling their expectation and delivers utility.

We told Garten and team that the secret to success was to make it easy for people to give. If they would create a credit card that allowed people to give to their specific charity and deliver on the inherent drivers of their decision, Charity Charge would create utility for their consumers.

Our charitable giving study showed that the majority of donors gave to a charity because of a Personal Connection to a Cause. Additionally, if a charity wanted to deliver utility, it had to satisfy the secondary driver of Personal Connection to Cause for four additional Decision Types.[4] (Figure 1)

Figure 1: Charitable Giving Decision Types

Figure 1: Charitable Giving Decision Types

When making a decision or defining the expected utility of a product, humans use a unique set of elements in a special order, creating individual decision templates. These templates are the evaluation mechanisms establishing a Utility Expectation that drives preference, purchase and ultimately an obtainment of brand utility. (Figure 2)

Figure 2: Behavioral Economics Model

Figure 2: Behavioral Economics Model

It is important to note that a brand needs to fulfill each element’s expectation in the decision template starting with the primary driver on the left. (Figure 3)

Figure 3: Understanding Utility Expectation For One Decision Type

Figure 3: Understanding Utility Expectation For One Decision Type

In giving the majority of donors the option to engage with their particular charity, it was vital that the credit card not only serviced one charity, as it was typical, but as many charities as possible. In the end, Charity Charge designed a credit card that wasn’t only on par with regular credit cards, but instead of earning points for airline miles or hotel stays, customers carrying the card donate money by spending money.

Today, the Charity Charge credit card lets consumers spend money on anything they want, while simultaneously earning 1% on every purchase for donations to any nonprofit of their choice, including schools and religious organizations.

“When we started Charity Charge, we had intuitions about the reasons why consumers gave to charities. Behavioral Science Lab helped us uncover the qualitative and quantitative data-driven facts about why consumers give to charity and how they prefer to give,” said Garten, founder and CEO of Charity Charge. “This concrete data supported our hypothesis and was instrumental in Charity Charge’s ability to secure a partnership with MasterCard.” The Charity Charge credit card is available in the U.S. June 2016, and Behavioral Science Lab continue to monitor and partner in the next phase of the venture.


[1]Gohmann, T. and Goy, C., Cracking the Code on Why We Give to Charities, Behavioral Science Lab, 2014

[2] Holmes, CreditCard.com, Credit card ownership statistics, 2014.

[3] Colloquy, Buried Treasure: The 2011 Forecast of U.S. Consumer Loyalty Program Points Value, April, 2011. 2010 perceived value of points issued in the United States across industries was $48 billion. GDP in the U.S. in 2010 was 14.96 trillion. The resulting ratio of 0.0032 was then applied to 2014 data.

[4] Gohmann, T. and Goy, C., Cracking the Code on Why We Give to Charities, Behavioral Science Lab, 2014