Charities find dollars on the Internet
By Michael Coren
(CNN) -- Charities looking to fill their stockings this year over the Internet are encountering a new generation of donors promising to change the face of philanthropy.
"There's definitely a difference in demographics for us as you introduce new technology," said Michael Schreiber, vice president for enterprise services with United Way of America. "There is more specific expectation of information ... and people tied to a particular cause."
As nonprofits develop their online presence, Internet donations are entering the mainstream of philanthropy. Donations collected over the Internet still account for a fraction of what Americans give each year, but the volume is growing.
The NonProfit Times, a publication for nonprofit managers, reported that online fund raising for nonprofits brought in about $2 billion in 2003, a 60 percent increase over the previous year. Overall, Americans gave $241 billion to charity in 2003.
Philanthropic technology is catching up to its commercial cousins by tracking donor habits, responding to requests and creating convenient ways to donate online and even generate charity just by shopping.
Much of the technology is in its infancy, but companies that match donors with charities are on the rise and the dollars have rolled in with a new wave of giving.
"Becoming a philanthropist or socially responsible person has become really hip," said Stacie Mann, director of marketing for Network For Good, based in Washington, D.C. "We are trying to continue to make that connection between doing good and feeling good."
The Network for Good Web site helps a new generation of philanthropists find causes close to their hearts and homes by allowing potential donors to search charities by zip code, state and cause.
The non-profit founded in 2001 by Time Warner Foundation, AOL, Cisco Inc. and Yahoo!, claims to be the Internet's leading charitable resource -- an e-philanthropy site where individuals donate time and money. CNN is a unit of Time Warner.
The company said it has distributed more than $43 million to about 15,000 nonprofits over the past four years. The number of donors on its Web site -- about 80,000 in 2003 --- has doubled every year since its inception in 2001.
"Its a combination of convenience and ease and getting those people who are new and younger [to give]," Mann said.
Other organizations such as Benevolink are using technology to invent new ways to give, sometimes without costing consumers a dime.
The Atlanta-based company founded in 2002 currently distributes money to about 200 nonprofits chosen by consumers on the site. Benevolink's Web site matches customers with products sold by philanthropy minded corporations from Sears to Sports Authority.
When customers shop with retailers through Benevolink's Web site, the companies agree to dedicate a percentage -- about 7 percent on average -- of the purchase price to customers' choice of charities. Four times a year, Benevolink subscribers decide where money earned during their shopping sprees is deposited.
"Technology has opened up some new avenues that simply didn't exist not too long ago," said Karen Clay, vice-president for non-profit relations at Benevolink. "We see huge potential for Benevolink as a unique way of giving across the board."
Increasingly, companies have come to see charity as part of their business plan.
A recent study by Boston-based Cone Inc., a marketing and communications firm, found that 90 percent of consumers would consider not doing business with a firm if they knew it was a poor corporate citizen. Eighty-five percent said they would speak out against that company to family and friends.
Companies are taking note. Corporate giving increased about 41 percent in the five years before 2003, according to the Committee to Encourage Corporate Philanthropy, a New York business group advocating strategic philanthropy.
The trend is also changing the way charities see themselves, say non-profit managers. The santas outside department stores could give way to more sophisticated marketing techniques usually reserved for businesses.
"The difference is that nonprofits are having to think and act more in a market sense than ever before," said Clay. "This is requiring [them] to do more with less."