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A new app aims to help millennials feel less guilty about how they spend money

Sarah Todd
commuter holds coffee cup and phone

Feeling guilty about how we spend our money is an important part of the conscious consumer’s experience. Ordering a latte in a to-go cup is a nice treat that also happens to add to the world’s overflowing landfills. Buying a cheerful fast-fashion sweater means supporting an infrastructure that exploits low-wage workers and perpetuates global pollution. Taking a flight home to see your family? Why not just stop off at the North Pole on your way and drown a polar bear yourself?

There are a number of ways to deal with the troubling feeling that that our everyday choices are making the world worse. Consumers can explore sustainable, fair-trade or ethically-minded alternatives; they can push for policy changes or simply buy less. But inevitably, some of us are still going to wind up spending money on items (gas, Diet Coke, Amazon Prime) with an uneasy conscience. And so a new app aims to address the psychological toll of living in a consumerist society by making it easier for people to ensure that at least some of their money is going to a good cause.

Momentum, a venture-backed app created by three former staffers from Duke University’s behavioral research-focused Center for Advanced Hindsight, is positioning itself as the Venmo of charitable giving. Much of the philanthropic world still relies on the old-fashioned donation method of checks and cash, according to Momentum co-founder and CEO Nick Fitz. “Millennials don’t do that,” he says. “They’re used to personalized, automated systems.”

And so Momentum, which became available to the public in November, borrows from the model of automatic saving and investment apps like Acorn, Digit, and Robinhood. Users can set a “rule” that automates their donations. That might be to offset certain purchases, such as donating to a charity that fights climate change every time you buy gas; to earmark 2% of each paycheck to go to an anti-poverty group; or to address a particular social problem, such as giving money to a gun control advocacy group every time there’s a school shooting in the US. With their bank accounts connected to to the app, users can go about business as usual with the knowledge that they’re contributing to the causes they care about.

Fitz, who spent a decade in academia working in behavioral psychology, says that in his research at Duke, he found that “people want to give about two and a half times more than they currently do.” What gets in the way are logistical barriers: People don’t know which charities will make the best use of their money, or they don’t have a process in place as to when and how they’ll donate. “You don’t wake up in the morning and are like, ‘Hell yes, I want to give $50,” notes Fitz. To smooth out the process, Momentum also recommends charities that have been vetted by groups like GiveWell and ImpactMatters, which evaluate how nonprofits spend their money, so that people can feel assured that their donations are making a real impact.

The app—which is meant to cater to young people in particular—is also targeting a generation that’s financially strapped, but nonetheless has shown a strong commitment to charitable causes. The fact that it facilitates smaller donations means that it may appeal to those who can’t afford to give much, but who have enough room in their budgets to spare an extra dollar or two. “At some point, I was having a beer and I was like, ‘I know that people don’t have don’t have clean water, I get the dystopia, but I’m still going to order this beer or this coffee,'” Fitz explains. “But if it’s $7 or $6 or whatever, it doesn’t matter at all on my side, but it actually adds up.” If we can afford to buy a drink at a bar, in other words, we can probably spare an extra dollar or two—thereby forming a habit that incorporates giving into our daily routines.

Right now, Momentum’s business model relies on its funding from VCs and angel investors, and on the generosity of its user base. The app is free to use, and 100% of the donations made on the platform go to the users’ intended charities; the app merely invites users to leave a tip to support the app on top of the donations. It’s all right by Fitz if the company doesn’t bring in much; he and his co-founders originally considered making it a nonprofit. “We only made this to move money,” Fitz says. “If it turns out everybody gets on and is like, we want to leave 0% [as tip], but we’re now moving $50 a month from tons of people, we can go and say, We’re moving millions [of dollars] to charity, we need grants, and I think we’d be okay after that.”

At a time when it’s easy to feel pessimistic about the state of the world, Momentum’s pitch is decidedly upbeat. It proposes that while many of us are unfortunately complicit in perpetuating injustices, there are also many people who have a genuine desire to make the world a better place—and that taking action to counter society’s ills is not just possible, but affordable and convenient. “A big thing for me is, how do you help people live how they want to live?” Fitz notes. He’s betting the answer lies in making it a little bit easier to spend ethically.

 

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