Amazon.com’s Experiment to Raise Money Produces $1.7-Million

Amazon.com established itself as a powerful philanthropic force in 2001 by raising $5-million for the American Red Cross through its Web site within just 72 hours of the September 11 terrorism attacks.

But the company’s latest fund-raising experiment — a contest aimed at encouraging customers to donate to 10 charities — raised far less money.

The charities, mostly small groups that were not well known to the public, raised a combined $1.7-million during the competition, which ran from July 19 to September 30. That is an impressive figure considering that no single gift could exceed $1,000.

But it is also less than it might have been had Hurricane Katrina not made landfall along the Gulf Coast at the end of August. The massive damage the storm caused prompted many nonprofit groups in the contest to put off plans to aggressively promote the online contest.

DonorsChoose, in New York, won the competition by raising $790,000 through Amazon’s site. Amazon matched that amount, bringing the group’s total earnings to $1.6-million. (Amazon had been willing to give up to $1-million in a dollar-for-dollar match.)

The money from the contest is a significant amount for DonorsChoose, which gives teachers an online forum to post requests for such things as classroom supplies, field-trip money, or funds for special projects. Last year, the group raised $3.1-million from private sources.

Yet the charity also spent a fair amount of time and energy raising those dollars.

“We knew that we were going to have to work our butts off because we were one of the smallest groups in the contest,” says Charles Best, the 30-year-old founder of DonorsChoose. The charity had just 14 staff members when the contest started.

The group’s board chairman personally sent out several hundred e-mail messages to friends and donors informing them of the contest and asking them to consider making a gift. Mr. Best estimates that his group was able to raise about $100,000 that way.

The charity also sent electronic pledge forms with links to the Amazon site as part of its weekly notes to donors. Mr. Best says the group’s Web engineer worked nearly nonstop for three days to set up the forms in a way that would enable the organization to track when gifts were made on its behalf through Amazon using the forms.

The group also held fund-raising parties in Chicago, New York, San Francisco, and Durham, N.C. People who went to the parties were asked to donate amounts from $65 to $150, depending on the location of the party, and then told to bring a printout of their receipt from Amazon as their admission ticket to the events.

Unexpected help came from Hollywood. Mr. Best got a surprise call early on in the contest from the actress Claire Danes. Ms. Danes — who is best known for her work in the movie Romeo + Juliet, and the television show My So-Called Life — had heard about the Amazon contest and arranged to meet Mr. Best for lunch to learn more about the charity’s work. Mr. Best says the actress told him she had attended public schools herself and was looking for a way to support them.

After the meeting, Ms. Danes sent e-mail notes to her friends about the contest, and she gave the charity permission to use her name in its own e-mail appeals.

1,000 Applications

DonorsChoose became one of the 10 finalists after being selected by a panel of judges that included Muhammad Ali; Henry Kissinger; Téa Leoni, the actress who also serves as Unicef’s national ambassador; and Amazon’s founder, Jeff Bezos.

About 1,000 nonprofit organizations applied for the contest, a list that was whittled down to 25 by the Stanford Business School’s Center for Social Innovation.

In addition to DonorsChoose, the finalists were Appalachian Sustainable Development (Abingdon, Va.), Community Voice Mail (Seattle), EARN (San Francisco), First Book (Washington), KaBOOM (Washington), KickStart (San Francisco), Pact Inc.’s Worth program (Washington), PATH (Seattle), and Teach For America (New York).

Patty Smith, a spokeswoman for Amazon, said the company didn’t know what to expect when it started the contest, and ended up being impressed with the results. “We were really surprised and pleased at how much money was raised, and really proud of the groups for the types of promotions they did,” she says. She adds that Amazon has not yet decided whether it will repeat the contest next year.

All of the money raised during the contest will go to the charities specified by the donors, and Amazon says it will pass on donor names and contact information to the groups.

In addition to e-mail messages and Web announcements, some of the finalists asked local news organizations to publicize the contest.

As part of the competition, Community Voice Mail designed an animated short film for its Web site that describes its mission: providing free, 24-hour telephone voice-mail services to people who are homeless. At the end of the film, viewers were directed to the Amazon donation page. The organization also hired a fund-raising consultant who helped get mentions of the contest into charity-related blogs.

How much such promotions paid off for Community Voice Mail is unclear. The group said it was waiting to disclose the amount it raised from the contest until after its board meets in November.

The charity did see online donations overall increase by 80 percent during the 11 weeks that coincided with the contest. But much of that gain had to do with interest from donors in supporting the charity’s voice-mail program for people displaced by Hurricane Katrina.

Jennifer Brandon, Community Voice Mail’s executive director, says the hurricane presented the charity with a dilemma in terms of the contest. “We had a lot of discussions here about whether to direct people to our Web site or Amazon’s, and we decided to send them to ours so as not to confuse people and not to use Katrina as a vehicle,” she says.

Other finalists decided to put off plans to promote the contest with donors after Katrina struck.

Teresa Guillien, a spokeswoman for PATH, an international health charity, says her group did not mention the contest to donors for several weeks out of respect for those affected by the storm.

Even with the pause in solicitations, the charity ended up raising about $30,000 through the contest.

Apart from the money raised, officials from the 10 finalist organizations said the contest helped raise visibility for their work, both with individual donors and with foundations.

Many also said it gave them new confidence in the growing power of online fund raising.

As Ms. Brandon, of Community Voice Mail, put it: “What we got out of this contest was huge. Our hunch now is that we can start shifting our outreach to the online community.”