Will financial inclusion always be possible without cash?

A large part of our donations is possible thanks to the presence of cash in our pockets. Spontaneous donation is much more difficult without cash, and people in need, as well as small charitable organizations, often experience difficulties in the world where money exists only in electronic form.

Charities Aid Foundation prepared a sudy of global donation trends. One of its key findings was that there has been a global decrease in giving since 2016. The organization also calls on governments around the globe to make it easy for people to give and offer incentives for giving where possible.

Is this appeal compatible with the cashless society concept? And what impact does the spread of non-cash payments have on spontaneous donations, one of the most important kinds of helping your fellow man?

Although the amount of spontaneous donations from one person is usually small, they play a large role in our society. Well, it was true until recently, when cash was one of the means of donation. A few coins or small bills, given out on the go, did not damage our budget, but meant a lot for the donation’s recipient.

However, since plastic cards have ousted bills in our wallets, life of rough sleepers has changed. The world is gradually switching to non-cash payments, and this also applies to charitable activities. Shops install charity terminals, donations are available online, and even charity collectors on the streets offer a terminal when they hear that you’ve got no change.

This luxury is not available to those that previously relied on spontaneous donations.

One of these people are homeless. They live on the streets, and often the only financial help they receive is a small part-time job and petty cash thrown into their mug. They rely on the Unexpected Kindness phenomenon, when a passer-by makes a donation often unexpectedly for himself.

Now, however, this type of assistance has become virtually inaccessible. I’ve got no cash - this is no longer excuse, but the real reason. Several charitable organizations tried to solve this problem by handing out terminals to the homeless, but this was not a very good solution. “Poverty is associated with a lack of technology,” says Brett Scott, a campaigner and expert on financial automation. “And that's partly what convinces people that someone's in need.

Indeed, the main reason for throwing a couple of coins into the mug is a sudden pinch of pity for the ragged and unhappy person. But the same rough sleeper, stretching out his hand with a card reader or a phone, often causes confusion or even outrage, and can be easily mistaken for a fraud. It turns out that non-cash donations are no longer working as effectively as cash did. And the latter is not possible anymore simply because there is not cash in cashless society.

In addition to the homeless, there is another category that relies on spontaneous donations. These are small charities - such as small school charity fairs or spontaneous fundraisings aimed at one recipient - for example, for a family with a single breadwinner who has been temporarily disabled. It is hard to provide technical support for them, and therefore they rely mainly on cash donations.

Tim Muzio, a financial consultant at Odgers Interim, tells about non-governmental organizations and other non-profit organizations in the UK: “The third sector and those it aims to help are the immediate and most obvious casualties of a cashless society… Given that one and two pence coins alone amount to more than £300million in charitable donations across the UK, society’s transition to digital payments is likely to be keenly felt by the third sector unless it can adapt.”

Given that the United Kingdom is one of the countries with cashless payments on the rise, and where the amount of donations is steadily declining (CAF World Giving Index 2017), this example makes us think about the impact that this new world has on donations.

In general, charity faces many problems in the modern world without cash. Many people want to remain anonymous in their donations, or they simply do not feel safe when they wave their bank card over a terminal in the hands of a homeless person. All this has a huge impact on those who need our help. Is a complete transition to a cashless society worth depriving them of hope and dignity?

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