PRX Executive Director takes on Apple’s no-donation policy

As the developer of the Public Radio Player and This American Life iPhone apps, PRX wishes there were easier ways to channel support back to the stations and programs whose content powers the apps.

Say you like an episode of TAL and want to support them — you’d click a simple donate button and be on your way. Right now, Apple’s no-donation policy makes that impossible.

PRX’s Executive Director Jake Shapiro takes on this policy in a guest editorial for Ars Technica: Apple’s no-donation policy for apps is a cop-out.

Here is the full post:
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Ars Technica recently started an interesting conversation on the mixed reaction to This American Life‘s use of push notifications in its iPhone app (developed at PRX) to encourage donations by its tens of thousands of users (each of whom paid $2.99 to buy the app).

I agree that app developers should use push notifications very sparingly, and they definitely run the risk of negative reactions if the message isn’t clearly tied to the app’s purpose and value. As Seth Lind from This American Life said in the discussion on the post, this was an experiment. Further donation messaging will be in-app, and mostly in the audio itself where Ira Glass can most effectively make the case for why This American Life deserves your support.

But the underlying issue is Apple’s wrongheaded policy of prohibiting donations in the first place.

The excuse that “Apple doesn’t want to be held responsible for ensuring that the charitable funds make it to the final destination” is a cop-out. Google Grants has tackled this already, and organizations like TechSoup and Guidestar do a sophisticated job of authenticating nonprofits and charities worldwide. Apple, of all companies, can’t credibly say it’s not up to the technical and logistical challenge.

And Apple is not just preventing app developers from putting “donate” buttons or any language suggesting that users contribute to charitable causes; it is also cutting off nonprofits from the most powerful direct-payment platform in the mobile marketplace. 1-Click payments are transformative for direct giving, and Apple has tens of millions of users with stored credit cards already accustomed to instant purchases—over 100 million if you add in iTunes users worldwide.

Jake Shapiro (credit: Matt MacDonald/PRX)

Even if Apple allowed app developers to include links and language about donation, without 1-Click they are still forcing users to jump through hoops with a separate mobile payment option. This could mean filling out long forms on a Safari page or launching a parallel app like PayPal. It’s an irritating deal-breaker for many users and it decimates follow-through (yes, text-to-donate is an increasingly promising path that is almost as seamless as an in-app transaction, but donations are limited to $10, and there are other current hurdles).

One option would be allowing in-app donations using Apple’s payment infrastructure, but this immediately runs into the next deal-breaking issue: Apple’s 30 percent cut is untenable for charities and nonprofits, and for the donors themselves. At most, Apple should charge a small 2-3 percent credit card processing fee for nonprofit and charitable contributions (Google charges nothing to qualified nonprofits using Checkout).

Apple recently demonstrated this is possible with its Haiti Donation button on iTunes earlier this year, passing 100 percent of the donations to the American Red Cross—a laudable and hopefully precedent-setting move.

For public media, where contributions from “listeners like you” are a critical source of revenue, Apple’s donation blocking is a particularly acute problem. For one thing, public media content is hugely popular across iTunes and iPhone/iPad—check out the top rankings for NPR, PBS, PRX and other public media podcasts, station streams, and apps. Apple is effectively blocking a major revenue stream to public media while enthusiastically featuring public media content and apps that enhance value for its devices.

The other powerful potential for public media is that users experience the service directly within the app. You listen to an incredible hour like “Giant Pool of Money” from This American Life about the subprime mortgage crisis and—click—you could contribute to support the show. Many other nonprofits and charities are delivering services one or more degrees removed from the apps themselves—helping fight malaria, for example.

But for those causes too, the opportunities for innovation around in-app donation are endless, with tremendous potential to connect people’s best charitable impulses to causes in the moment and on the go.

Where’s the charity?

I suspect the deeper reasons for Apple’s uncharitable stance is that the nonprofit and education markets are just that—“markets” that represent hundreds of millions of dollars of annual revenue to Apple in the form of computer, software, iPod, and now iPhone and iPad sales.

There is no financial upside for Apple to enable a direct path for nonprofit and charitable support. And note that there is no “Apple Foundation,” no “Apple Grants.” In fact, Apple has been called out as one of America’s least philanthropic companies. It’s also one that just passed Microsoft’s market capitalization as the most valuable technology company in the world.

The other issue gets to Apple’s broader competitive approach. If Apple permitted donations by users, it might have to change another restrictive policy: passing certain individual information to app owners/developers and content providers. Currently app developers get zero data from Apple about who buys and uses their apps, just a flat report of total downloads and resulting revenue if it’s a paid app. Perhaps Apple could work with an intermediary to bundle and process donations and handle any reporting and tax information. Ultimately, this is another logistical hurdle that Apple doesn’t seem to have the will to take on.

My estimate is that public media, nonprofits, and charities are already missing out on tens of millions of dollars of potential donations through iTunes and Apple devices, and hundreds of millions as the iPhone/iPad and whatever is next continue to grow in popularity and use.

By the way, none of this applies to Android.

Given that Apple is entirely willing and able to take tough and often unpopular stands with its tech partners, app developers, major labels, and major rivals, it may be quixotic to imagine that the nonprofit and public media sector can fight this battle and win.

So let’s pose the question directly to Steve Jobs: where’s Apple’s genius when it comes to supporting nonprofits?

Jake Shapiro is CEO of PRX, Public Radio Exchange, developers of the Public Radio Player and This American Life iPhone apps.

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