Nonprofits Riled by Apple Ban on iPhone Donations

December 8, 2010; Source: New York Times | Nonprofits don’t seem to be on Apple’s shiny radar. The company keeps apps that accept donations out of the iTunes store, and out of the toolboxes of nonprofits that would put those apps—and the donations—to use. This has the third sector riled up, enough so to circulate a petition to Apple’s CEO Steve Jobs on the subject—a petition that has quickly attracted thousands of signatories from the world over.

The explanation Apple has offered at first seems a reasonable one—they don’t want to shoulder the administrative costs of verifying charities and vetting the transaction process. Nonprofit pundits admit that’s a hefty burden to bear. But then, this is a trap of Apple’s own making. The company would require that donations be processed through their payment mechanism, the same one used when a song is purchased through iTunes, for example. Apple keeps a tight grip on their products, and allowing third party donations processing just doesn’t jive with their way of thinking about what the end user should be allowed to do.

PayPal was one such alternative, and it’s this case that has nonprofits so upset. Owned by e-Bay, PayPal partnered with another e-Bay friendly company, MissionFish, to accept donations in their app. MissionFish did all the legwork, functioning as the administrative back room for donations made in the app, but Apple had the project killed after two months.

So what’s keeping Apple from permitting third party options in the app store? Apple takes 30 percent of each transaction in the store, but it can’t skim off the top of in-app purchases; there’s simply no way to track those to Apple’s liking. Besides, taking 30 percent of a nonprofit donation would be objectionable, and Apple would want to consider how nonprofit transactions are processed differently than for-profit.

Tech-savvy nonprofit staffers have been sounding off about the decision to ditch MissionFish, and it’s spawned some vitriolic criticism of Apple. The company’s scant philanthropic track record, lack of charity pricing options, and poor social responsibility have been brought to the fore (see here and here). It was enough to prompt reknown nonprofit social media pundit Beth Kanter to ditch her iPhone, will others follow?

There’s good reason to believe that Android—the Google smartphone software that is available on multiple phones—is the way forward. The software is open source, which means users can develop what they like, unlike under Apple’s draconian regulations. PayPal, for example, is already developing the MissionFish donations software for Android. If Apple won’t put their minds to the nonprofit question, it may be solved by other developers.—James David Morgan