Building a Business on Regifting

What it is
Shift My Gift is a web-based service that allows registered users to transfer money to worthy causes--money that would otherwise have been spent on gifts. Donations are processed online through Network for Good, a Bethesda, Md., nonprofit organization. Through a partnership with GuideStar, a nonprofit reporting agency, users can access a database of more than 1.8 million IRS-recognized nonprofits and choose where they want the cash to go.

How it started
After hiking through some of Nepal's poorest regions, Blair Souder returned to his Lincoln University, Pa., home just in time for Black Friday, the post-Thanksgiving retail frenzy. Although the people in Nepal had very little, they "were very connected and seemed to be living in happiness and peace, as far as I could see," Souder says. It was a stark contrast to the shopping craze that kicks off the December holiday season in the States.

"I began thinking it would be cool to have a place online where people could easily [transfer their gifts to benefit others] and also create a bit of a movement around it," Souder says. "It would help people reflect on themselves: How am I going to celebrate the next event in my life? Do I really need more gifts?" He told his brother Kirk about the idea and the two went to work building the site.

Why it took off
The site, which has only been live since mid-August, attracted more than 2,000 discrete visitors within the first month, simply through word-of-mouth. The Souders plan a grassroots promotion campaign that will include up to 25 partner nonprofits to help spread the word through their own networks. One of the most recently featured nonprofits is the venerable Heifer International, which was established in 1944 and works with poor communities throughout the world to end hunger and poverty while caring for the earth.
The business case
Shift My Gift charges users a $1.49 processing fee per transaction--less than what it would cost to wrap and send most gifts through the U.S. Postal Service or courier. The fee is not tax-deductible, but the donation is. In addition, a 4.75 percent "grant" is withheld from each donation and given to Network for Good to offset the cost of processing (the grant is tax-deductible).

What's next
The Souders will work with their nonprofit partners to run donation campaigns and encourage gifting through the site. They're also working on a publicity campaign and increasing their social media profile to get the word out about their site, which Blair says is easy to use.

"For people who realize that they just don't want any more stuff and would like to use gift-giving occasions, like birthdays or weddings, to make a difference in the world, this allows them to celebrate in a more meaningful way," he says. "People are really responding to that message."